Home Or Away? Profit Shifting with Territorial Taxation

Home Or Away? Profit Shifting with Territorial Taxation
Author :
Publisher : International Monetary Fund
Total Pages : 38
Release :
ISBN-10 : 9798400216992
ISBN-13 :
Rating : 4/5 (92 Downloads)

Book Synopsis Home Or Away? Profit Shifting with Territorial Taxation by : Dominika Langenmayr

Download or read book Home Or Away? Profit Shifting with Territorial Taxation written by Dominika Langenmayr and published by International Monetary Fund. This book was released on 2022-09-09 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2009, the United Kingdom abolished the taxation of profits earned abroad and introduced a territorial tax system. Under the territorial system, firms have strong incentives to shift profits abroad. Using a difference-in-differences research design, we show that the profitability of UK subsidiaries in low-tax countries increased after the reform compared to subsidiaries of non-UK multinationals in the same countries by an average of 2 percentage points. This increase in profit shifting also leads to increases in measured productivity of the foreign affiliates of UK multinationals of between 5 and 9 percent.


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