Source versus residence based taxation with international mergers and acquisitions

Johannes Becker and Clemens Fuest

Journal of Public Economics, 2011, vol. 95, issue 1, 28-40

Abstract: This paper analyses tax competition and tax coordination in a model where capital flows occur in the form of mergers and acquisitions, rather than greenfield investment. In this framework, we show that differences in residence based taxes do not necessarily distort international ownership patterns. Moreover, tax competition yields globally efficient levels of source based corporate income taxes if residence based taxes on capital income are absent. In contrast, in the presence of residence based taxes on dividends, source based corporate income taxes are inefficiently high. The widespread view that tax coordination is less urgent if residence based taxes are available may therefore be misguided.

Keywords: Corporate taxation; Tax competition; Mergers and Acquisitions (search for similar items in EconPapers)
JEL-codes: F23 H25 H54 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272710001325
Full text for ScienceDirect subscribers only

Related works:
Journal Article: Source versus residence based taxation with international mergers and acquisitions (2011)
Working Paper: Source versus Residence Based Taxation with International Mergers and Acquisitions (2009)
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:pubeco:v:95:y:2011:i:1:p:28-40

DOI: 10.1016/j.jpubeco.2010.10.001

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().