Resource title

Corporate tax systems, multinational enterprises, and economic integration

Resource image

image for OpenScout resource :: Corporate tax systems, multinational enterprises, and economic integration

Resource description

Multinational firms are known to shift profits and countries are known to compete over shifty profits. Two major principles for corporate taxation are Separate Accounting (SA) and Formula Apportionment (FA). These two principles have very different qualities when it comes to preventing profit shifting and preserving national tax autonomy. Most OECD countries use SA. In this paper we show that a reduction in trade barriers lowers equilibrium corporate taxes under SA, but leads to higher taxes under FA. From a welfare point of view the choice of tax principle is shown to depend on the degree of economic integration.

Resource author

Hans Jarle Kind, Karen Helene Midelfart, Guttorm Schjelderup

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18880

Resource license

Adapt according to the presented license agreement and reference the original author.