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Investissements (in)directs à l’étranger et fiscalité des entreprises .
Author(s) -
Wamser Georg
Publication year - 2011
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2011.01682.x
Subject(s) - foreign direct investment , multinational corporation , corporate tax , business , tax planning , international economics , german , monetary economics , investment (military) , foreign portfolio investment , economics , double taxation , tax avoidance , open ended investment company , return on investment , microeconomics , finance , macroeconomics , politics , history , archaeology , political science , law , production (economics)
Foreign investments of multinational firms are often complex in that they involve conduit entities. In particular, a multinational can pursue either a direct or an indirect investment strategy, where the latter involves an intermediate corporate entity and is associated with enhanced opportunities for international tax planning. As a consequence, in the case of indirect investments, the role of corporate taxation in destination countries may change. This paper investigates the effects of corporate taxation on foreign investment decisions of German multinationals, taking explicitly into account that firms choose in a first stage the investment regime (direct vs. indirect). The empirical findings, consistent with theoretical predictions, suggest that tax effects differ according to whether the investment is direct or indirect.