EconPapers    
Economics at your fingertips  
 

Saving taxes through foreign plant ownership

Peter Egger (), Wolfgang Eggert and Hannes Winner ()

Journal of International Economics, 2010, vol. 81, issue 1, 99-108

Abstract: This paper analyzes to which extent foreign plant ownership involves lower tax payments than domestic plant ownership. We assess hypotheses about the tax savings of endogenous foreign subsidiary ownership relative to domestic firms in a data-set of 507,542 foreign- and domestically-owned manufacturing plants in Europe. We identify a significant profit tax saving of endogenous foreign ownership in high-tax host countries. There is evidence of profit shifting which seems more pronounced than debt shifting in Europe: multinationals earn significantly higher profits than comparable domestic units in low-tax countries but significantly lower ones in high-tax countries. Consequently, profit tax payments of foreign-owned firms are lower than those of domestic firms in high-tax countries but higher in low-tax countries.

Keywords: Company; taxation; Multinational; firms; Propensity; score; matching (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022-1996(09)00157-3
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Saving Taxes Through Foreign Plant Ownership (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:81:y:2010:i:1:p:99-108

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-06-09
Handle: RePEc:eee:inecon:v:81:y:2010:i:1:p:99-108