Source versus Residence Based Taxation with International Mergers and Acquisitions

Johannes Becker and Clemens Fuest

No 2854, CESifo Working Paper Series from CESifo

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: 2009
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Source versus residence based taxation with international mergers and acquisitions (2011)
Journal Article: Source versus residence based taxation with international mergers and acquisitions (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2854

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