Do multinationals 'misuse' corporate income-tax holidays: an analysis based on Hungarian balance-sheet figures

Miklos Szanyi ()
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Miklos Szanyi: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences

No 164, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: This paper has sought to check whether tax incentives provided by the Hungarian state have induced measurable profit transfers by multinational companies from spatial locations other than Hungary. The existence of such transfers may be very relevant to a discussion of tax policy and the ‘race to the bottom’ argument, as it would indicate that ‘unfair’ tax measures not only divert multinational investment from developed countries, but generate measurable profit transfers for taxavoidance purposes, from these countries to low-tax locations and tax havens. This may be the case even though some profit-transfer measures (e.g. transfer pricing) are internationally regulated.

Keywords: Hungary; manufacturing; taxation; multinationals; profit (search for similar items in EconPapers)
Pages: 20 pages
Date: 2005-12
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Persistent link: https://EconPapers.repec.org/RePEc:iwe:workpr:164

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