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La fiscalité de l’investissement étranger passif .
Author(s) -
Ruf Martin,
Weichenrieder Alfons J.
Publication year - 2012
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.1540-5982.2012.01737.x
Subject(s) - german , subsidiary , business , investment (military) , foreign direct investment , income tax , international economics , tax reform , tax exemption , economics , labour economics , economic policy , market economy , finance , macroeconomics , multinational corporation , political science , archaeology , politics , law , history
The paper evaluates the working of German CFC rules that restrict the use of foreign subsidiaries located in low‐tax countries to shelter passive investment income from home taxation. While passive investments make up a significant fraction of German outbound FDI, we find that German CFC rules are quite effective in restricting investments in low‐tax jurisdictions. We find evidence that the German 2001 tax reform, which unilaterally introduced exemption of passive income in medium‐ and high‐tax countries, has led to some shifting of passive assets into countries for which the exemption was previously limited.