A Comparison of the Tax†Motivated Income Shifting of Multinationals in Territorial and Worldwide Countries

Kevin Markle

Contemporary Accounting Research, 2016, vol. 33, issue 1, 7-43

Abstract: This paper tests for differences in the tax†motivated income†shifting behaviors of multinationals subject to different systems of taxing foreign earnings. I find that, on average, multinationals subject to territorial tax regimes shift more income than those subject to worldwide tax regimes. The difference in shifting, however, is driven by a difference in the subset of shifting that involves the parent country; multinationals in the two groups appear to shift equally among their foreign affiliates. In additional tests, I find that the shifting of worldwide firms is sensitive to reinvestment in the recipient countries, while that of territorial firms is not.

Date: 2016
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https://doi.org/10.1111/1911-3846.12148

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Persistent link: https://EconPapers.repec.org/RePEc:wly:coacre:v:33:y:2016:i:1:p:7-43

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