Download or read book Spillovers in International Corporate Taxation written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-09-05 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the nature, significance and policy implications of spillovers in international corporate taxation—the effects of one country’s rules and practices on others. It complements current initiatives focused on tax avoidance by multinationals, notably the G20-OECD project on Base Erosion and Profit shifting (BEPS). The paper draws on the IMF’s experience on international tax issues with its wide membership, including through technical assistance (TA), and on its previous analytical work, to analyze spillovers and how they might be addressed. In doing so, it goes beyond current initiatives to look at a wide set of possible responses.
Download or read book Spillovers in International Corporate Taxation written by Internationaler Währungsfonds and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the nature, significance and policy implications of spillovers in international corporate taxation-the effects of one country's rules and practices on others. It complements current initiatives focused on tax avoidance by multinationals, notably the G20-OECD project on Base Erosion and Profit shifting (BEPS). The paper draws on the IMF's experience on international tax issues with its wide membership, including through technical assistance (TA), and on its previous analytical work, to analyze spillovers and how they might be addressed. In doing so, it goes beyond current initiatives to look at a wide set of possible responses.
Download or read book Spillovers in International Corporate Taxation written by and published by . This book was released on 2014 with total page 85 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the nature, significance and policy implications of spillovers in international corporate taxation - the effects of one country's rules and practices on others. It complements current initiatives focused on tax avoidance by multinationals, notably the G20-OECD project on Base Erosion and Profit shifting (BEPS). The paper draws on the IMF's experience on international tax issues with its wide membership, including through technical assistance, and on its previous analytical work, to analyze spillovers and how they might be addressed. In doing so, it goes beyond current initiatives to look at a wide set of possible responses.
Download or read book Positive Spillovers in International Corporate Taxation and the European Union written by L. Ateş and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The international spillover effects of specific domestic policies and practices have been subjected to increasing scrutiny from a range of international organizations, academia, and civil institutions with tax policy and practice both central in this discussion. Nevertheless, the extant international tax spillover analyses explore a limited set of spillover pathways or indicators that have been criticized in the literature for not being sufficiently inclusive. The focus of this article is on a newly launched index that includes a comprehensive set of plausible pathway s in which spillovers occur. The Corporate Tax Haven Index (CTHI) explores twenty key tax spillover indicators under five categories and assesses sixty-four countries ' tax systems in order to identify policies that should be considered for corporate tax reform to mitigate cross-border tax spillovers. This article particularly aims to highlight international corporate tax spillover path ways in the European Union Member States' domestic tax laws, regulations and documented administrative practices but limits its scope to domestic tax rules that dispense with positive spillovers. Finally, it analyses Member States' current performance and concludes with recommendations for future tax reforms in the European Union.
Download or read book Tax Spillovers from US Corporate Income Tax Reform written by Sebastian Beer and published by International Monetary Fund. This book was released on 2018-07-13 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper describes, and where possible tentatively quantifies, likely tax spillovers from the U.S. corporate income tax reform that was part of the broader 2017 tax reform. It calculates effective tax rates under various assumptions, showing among other findings, how the interest limitation and the Foreign Derived Intangible Income provision can raise or reduce rates. It tentatively estimates that under constant policies elsewhere, the rate cut will reduce tax revenue from multinationals in other countries by on average 1.6 to 5.2 percent. If other countries react in line with historical reaction functions, the revenue loss from multinationals rises to an average of 4.5 to 13.5 percent. The paper also discusses profit-shifting, real location, and policy reactions from the more complex features of the reform.
Download or read book Corporate Taxation in the Global Economy written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2019-03-10 with total page 91 pages. Available in PDF, EPUB and Kindle. Book excerpt: The policy paper Corporate Taxation in the Global Economy stresses the need to maintain and build on the progress in international cooperation on tax matters that has been achieved in recent years, and in some respects now appears under stress. With special attention to the circumstances of developing countries, the paper identifies and discusses various options currently under discussion for the international tax system to ensure that countries, and in particular low-income countries, can continue to collect corporate tax revenues from multinational activities.
Download or read book International Corporate Tax Reform written by International Monetary and published by International Monetary Fund. This book was released on 2023-02-06 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: To relieve the pressure on the outdated international corporate tax system, an ambitious reform was agreed at the Inclusive Framework (IF) on Base Erosion and Profit Shifting in 2021, with now 138 jurisdictions joining. It complements previous efforts to mitigate profit shifting by addressing the challenges of the digitalization of the economy through a new allocation of taxing rights to market economies (Pillar 1) and tax competition through a global minimum corporate tax (Pillar 2). This paper concludes that the agreement makes the international tax system more robust to tax spillovers, better equipped to address digitalization, and modestly raises global tax revenues.
Download or read book International Tax Spillovers and Tangible Investment with Implications for the Global Minimum Tax written by Mr. Michael Keen and published by International Monetary Fund. This book was released on 2023-08-04 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper articulates and, using newly-assembled data, explores how international taxation affects aggregate tangible cross-border investment. Spillovers from statutory tax rates abroad seem: As sizable as effects from the host’s rate; larger than previous consensus values (attributed to a systematic bias from FDI data); and consistent with ‘implicit’ profit shifting through real investment (rather than ‘paper’ profit shifting). Contrary to much policy discussion, the results also imply that: Host countries’ marginal effective tax rates have at best a weak effect on real investment; those elsewhere have none; and, applied to the prospective global minimum tax, inward tangible investment in most sample countries will increase.
Download or read book U S Corporate Income Tax Reform and its Spillovers written by Kimberly Clausing and published by International Monetary Fund. This book was released on 2016-09-07 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the main distortions of the U.S. corporate income tax (CIT), focusing on its international aspects, and proposes a set of reforms to alleviate them. A bold reform to replace the CIT with a corporate-level rent tax could induce efficiency-enhancing reform of the international tax system. Since fundamental reform is politically difficult, this paper also proposes an incremental reform that would reduce tax expenditures, reduce the CIT rate to 25-28 percent, and impose a minimum rent tax on foreign earnings. Finally, this paper analyzes empirically the likely impact of the incremental on corporate revenues outside the U.S.: Though a U.S. rate cut would likely lower revenues elsewhere, implementation of a strong minimum tax could more than offset that effect for most countries with effective tax rates above 15 percent.
Download or read book International Corporate Tax Avoidance A Review of the Channels Magnitudes and Blind Spots written by Sebastian Beer and published by International Monetary Fund. This book was released on 2018-07-23 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral and corporate inversions. Moreover, it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1 percent—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.
Download or read book Base Erosion Profit Shifting and Developing Countries written by Ernesto Crivelli and published by International Monetary Fund. This book was released on 2015-05-29 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: International corporate tax issues are prominent in public debate, notably with the G20-OECD project addressing Base Erosion and Profit Shifting (‘BEPS’). But while there is considerable empirical evidence for advanced countries on the cross-country fiscal externalities at the heart of these issues, there is almost none for developing countries. This paper uses panel data for 173 countries over 33 years to explore their magnitude and nature, focusing particularly on developing countries and applying a new method to distinguish between spillover effects through real decisions and through avoidance —and quantify the revenue impact of the latter. The results suggest that spillover effects on the tax base are if anything a greater concern for developing countries than for advanced—and a significant one.
Download or read book Issues in International Taxation and the Role of the IMF written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2013-06-28 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the discussion of the Board work program on June 3, 2013, it was urged that the Fund be more present in current discussions of international tax issues. This note reviews key issues and initiatives in this area, and sets out a work plan that is focused on the Fund‘s mandate and macroeconomic expertise and that complements the work of other institutions, notably the OECD.
Download or read book Territorial vs Worldwide Corporate Taxation written by Ms.Thornton Matheson and published by International Monetary Fund. This book was released on 2013-10-03 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global investment patterns mean that effective taxation of foreign investors is of increasing importance to the economies of lower income countries. It is thus of considerable concern that the historical framework for cross-border income tax arrangements is not always well suited to allow low-income countries (LICs) effectively to generate tax revenues from profits on foreign direct investment (FDI). Several aspects of this framework contribute to the problem. This paper discusses, in particular, the likely effect of a shift by major economies from the system of worldwide corporate taxation toward a territorial system on the volume, distribution, and financing of FDI, focusing on LICs. It then empirically analyzes bilateral outbound FDI data for the UK for 2002–10 to determine whether the move to territoriality made corporations more sensitive to hostcountry statutory tax rates. Supporting evidence for this hypothesis is found for FDI financed from new equity.
Download or read book Japan s Corporate Income Tax written by Ruud A. de Mooij and published by International Monetary Fund. This book was released on 2014-08-04 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores how corporate income tax reform can help Japan increase investment and boost potential growth. Using international and Japan-specific empirical estimates of corporate tax elasticities, investment is predicted to expand by around 0.4 percent for each point of rate reduction. International consensus estimates suggest further that between 10 and 30 percent of the static revenue loss could be recovered in the long run through dynamic scoring, although Japan’s offset may be closer to the lower bound. Compensating fiscal measures are necessary in light of Japan’s tight fiscal constraints. The scope for base broadening in the corporate income tax is found to be limited and some forms of base broadening will undo positive investment effects of a rate cut. Alternative revenue sources include higher consumption and property taxes. A gradual approach toward lowering tax rates mitigates windfall gains and reduces short-run revenue costs. An incremental allowance-for-corporate-equity system could boost investment with limited fiscal costs in the short run.
Download or read book A Firm Lower Bound Characteristics and Impact of Corporate Minimum Taxation written by Aqib Aslam and published by International Monetary Fund. This book was released on 2021-06-08 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the role of minimum taxes and attempts to quantify their impact on economic activity. Minimum taxes can be effective at shoring up the corporate tax base and enhancing the perceived equity of the tax system, potentially motivating broader taxpayer compliance. Where political and administrative constraints prevent reforms to the standard corporate income tax, a minimum tax can help mitigate base erosion from excessive tax incentives and avoidance. Using a new panel dataset that catalogues changes in minimum tax regimes over time around the world, firm-level analysis suggests that the introduction or reform of a minimum tax is associated with an increase in the average effective tax rate of just over 1.5 percentage points with respect to turnover and of around 10 percent with respect to operating income. Minimum taxes based on modified corporate income lead to the largest increases in effective tax rates, followed by those based on assets and turnover.
Download or read book Issues in International Corporate Taxation written by Congressional Service and published by Createspace Independent Publishing Platform. This book was released on 2018-05-30 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the major motivations for the 2017 tax revision (P.L. 115-97) was concern about the international tax system. Issues associated with these rules involved the allocation of investment between the United States and other countries, the loss of revenue due to the artificial shifting of profit out of the United States by multinational firms (both U.S. and foreign), the penalties for repatriating income earned by foreign subsidiaries that led to the accumulation of deferred earnings abroad, and inversions (U.S. firms shifting their headquarters to other countries for tax reasons). In addition to lowering the corporate tax rate from 35% to 21% and providing some other benefits for domestic investment (such as temporary expensing of equipment), the 2017 tax bill also substantially changed the international tax regime. The tax change moved the system from a nominal worldwide tax on all foreign-source income, with a credit against U.S. tax for foreign taxes due, to a nominal territorial system that does not tax foreign-source income. Nevertheless, both systems could be considered a hybrid of a worldwide and territorial system. Prior law reduced the tax on foreign-source income by allowing deferral (taxing income of foreign subsidiaries only if it was repatriated, or paid as a dividend to the U.S. parent) and cross-crediting of foreign taxes (so the credit for high taxes paid in one country could offset U.S. tax on income from a low-tax country). The new system exempts dividends, but also imposes a current worldwide tax on global intangible low-taxed income (GILTI), but at a lower rate. It also introduces a corresponding lower rate on intangible income derived from abroad from assets in the United States (foreign-derived intangible income, or FDII). The new law adds the base erosion and anti-abuse tax (BEAT) to existing anti-abuse measures aimed at artificial profit shifting. BEAT imposes a minimum tax on ordinary income plus certain payments to related foreign companies. Despite the lower corporate tax rate, it is not clear that capital will be shifted into the United States from abroad; although a lower rate reduces the tax rate on equity-financed investments, it decreases the subsidy to debt-financed investments. Whether the capital stock increases or decreases depends on the magnitude of the tax changes (which appear largely offsetting) and the international mobility of debt versus equity. It is also not clear whether the capital stock will be allocated more efficiently or in a way more optimal for U.S. welfare, although economic theory suggests that reducing the tax subsidy for debt is a clear improvement. Although a territorial tax may make profit shifting more attractive, overall, given other elements of the new system, it appears to make profit shifting less important. GILTI and FDII bring the tax treatment of income from intangibles in the United States and abroad closer together, and BEAT and stricter thin capitalization rules (rules limiting interest deductions) also limit profit shifting, including shifting through leveraging. The new system ends the penalties (except for portfolio investment in foreign firms) for repatriating earnings and thus eliminates the prior incentives to retain earnings abroad. A series of measures aimed at inversions appears to make inversions much less attractive. Some of the measures may violate international agreements such as the World Trade Organization (WTO), bilateral tax treaties, and Organization for Economic Cooperation and Development (OECD) minimum standards to prevent harmful tax practices. There have been a number of concerns about design features in the new regime, including the dividend deduction, GILTI, FDII, BEAT, and other features. A variety of options might be considered to address these issues.
Download or read book A Destination Based Allowance for Corporate Equity written by Shafik Hebous and published by International Monetary Fund. This book was released on 2018-11-08 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Following renewed academic and policy interest in the destination-based principle for taxing profits—particularly through a destination-based cash flow tax (DBCFT)—this paper studies other forms of efficient destination-based taxes. Specifically, it analyzes the Destination-Based Allowance for Corporate Equity (DBACE) and Allowance for Corporate Capital (DBACC). It describes adjustments that are required to turn an origin into a destination-based versions of these taxes. These include adjustments to capital and equity, which are additional to the border adjustments needed under a DBCFT. The paper finds that the DBACC and DBACE reduce profit shifting and tax competition, but cannot fully eliminate them, with the DBACE more sensitve than the DBACC. Overall, given the potential major political cost of switching from an origin to a destination-based tax system, we conclude that advantages of the DBCFT are likely to outweigh the transitional advantages of the DBACE/DBACC.
