scholarly journals The Role of Transfer Prices in Profit-Shifting by U.S. Multinational Firms: Evidence from the 2004 Homeland Investment Act

2017 ◽  
Vol 2017 (055) ◽  
Author(s):  
Aaron Flaaen ◽  
Keyword(s):  
Multinational Firms ◽  
Profit Shifting ◽  
Transfer Prices

scholarly journals Substitution across profit shifting methods and the impact on thin capitalization rules

2021 ◽  
Author(s):  
Gideon Goerdt ◽  
Wolfgang Eggert
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Multinational Firm ◽  
Profit Shifting ◽  
Goods And Services ◽  
Internal Goods ◽  
Transfer Prices ◽  
Debt Shifting ◽  
The Impact ◽  
Thin Capitalization

AbstractThin capitalization rules limit firms’ ability to deduct internal interest payments from taxable income, thereby restricting debt shifting activities of multinational firms. Since multinational firms can limit their tax liability in several ways, regulation of debt shifting may have an impact on other profit shifting methods. We therefore provide a model in which a multinational firm can shift profits out of a host country by issuing internal debt from an entity located in a tax haven and by manipulating transfer prices on internal goods and services. The focus of this paper is the analysis of regulatory incentives, $$(i)$$ ( i ) if a multinational firm treats debt shifting and transfer pricing as substitutes or $$(ii)$$ ( i i ) if the methods are not directly connected. The results provide a new aspect for why hybrid thin capitalization rules are used. Our discussion in this paper explains why hybrid rules can result in improvements in welfare if multinational firms treat methods of profit shifting as substitutes.

Performance of Mid-Size Internationalized Indian Firms: Evaluating the Role of Family Control

2019 ◽  
Vol 9 (12) ◽  
pp. 387-400
Author(s):  
Faisal M Ahsan ◽  
Ajay Singal
Keyword(s):  
Multinational Firms ◽  
International Expansion ◽  
Negative Effects ◽  
Family Control ◽  
Listed Firms ◽  
And Performance ◽  
Performance Heterogeneity ◽  
The Impact ◽  
Degree Of Internationalization

The rapidly growing and gradual emergence of multinational firms from the Indian sub-continent now calls for thorough re-understandings of extant theories and existing ideologies of the ‘internationalization’ process. We would initially assess the three-stage model of internationalization in the context of mid-size Indian firms and intend to investigate the relationship between performance and degree of internationalization. Based on the longitudinal dataset (2005-12) of publicly listed firms, our findings suggested that mid-size firms remained stuck up in the first stage of internationalization and accordingly exhibit a downward-sloping relationship between internationalization’s degree and performance. Most of the mid-size firms continued to show a predominantly family-controlled stance, and the impact of family ownership shows negative effects on the degree of internationalization. By examining the performance heterogeneity in family-owned firms towards internationalization, this paper enriches the existing body of research and assume it to be a prolific addition in the literature on international expansion.

scholarly journals Are Less Developed Countries More Exposed to Multinational Tax Avoidance? Method and Evidence from Micro-Data

2019 ◽  
Vol 34 (3) ◽  
pp. 790-809 ◽  
Author(s):  
Niels Johannesen ◽  
Thomas Tørsløv ◽  
Ludvig Wier
Keyword(s):  
Developing Countries ◽  
Multinational Firms ◽  
Tax Avoidance ◽  
Institutional Development ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Tax Rates ◽  
Profit Shifting ◽  
Novel Approach ◽  
Data Requirements

Abstract This paper uses a global dataset with information about 210,000 corporations in 142 countries to investigate whether tax avoidance by multinational firms is more prevalent in less-developed countries. The paper proposes a novel approach to studying cross-border profit shifting, which has relatively low data requirements and is therefore particularly well-suited for the context of developing countries. The results consistently show that the sensitivity of reported profits to profit-shifting incentives is negatively related to the level of economic and institutional development. This may explain why many developing countries opt for low corporate tax rates in spite of urgent revenue needs and severe constraints on the use of other tax bases.

Challenges of Monitoring Tax Compliance by Multinational Firms: Evidence from Chile

2019 ◽  
Vol 109 ◽  
pp. 500-505
Author(s):  
Sebastián Bustos ◽  
Dina Pomeranz ◽  
José Vila-Belda ◽  
Gabriel Zucman
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Compliance ◽  
Tax Rates ◽  
Profit Shifting ◽  
Effective Tax Rates ◽  
Arm’S Length Principle ◽  
Debt Shifting

This paper reviews common challenges of taxing multinational firms, using Chile as a case study. We briefly describe key international tax avoidance methods: profit shifting to low-tax jurisdictions through transfer pricing and debt shifting. We discuss the prevalent policy to tax multinationals--the arm's length principle--and alternative proposals using apportionment formulas. Novel data from Chile show that multinationals make up a large share of GDP but report lower profit and effective tax rates than local firms. In 2011, Chile implemented a reform following OECD guidelines to enforce the arm's length principle. We discuss potential effects on tax collection and welfare.

Six Sigma implementation in Ireland: the role of multinational firms

2010 ◽  
Vol 27 (9) ◽  
pp. 1054-1066 ◽  
Author(s):  
Ton van der Wiele ◽  
Jos van Iwaarden ◽  
David Power
Keyword(s):  
Six Sigma ◽  
Multinational Firms

scholarly journals The Relationship between the Country‘s Global Competitiveness and its National MNEs

2019 ◽  
Vol 8 (2) ◽  
pp. 87-92
Author(s):  
Inga Aleksandrovna Mezinova ◽  
Janetta Benikovna Amirkhanyan ◽  
Oleg Valerjevich Bodiagin ◽  
Milena Miroslavovna Balanova
Keyword(s):  
Multinational Enterprises ◽  
Multinational Firms ◽  
Variance Inflation Factor ◽  
Global Competitiveness ◽  
Global Competitiveness Index ◽  
Inflation Factor ◽  
Competitiveness Index ◽  
Country Competitiveness ◽  
The Relationship

Abstract The main purpose of this paper is to study the influence of home-multinational enterprises on country global competitiveness and to determine how this influence changes with the stage of country competitiveness. Based on the regression model, Variance Inflation Factor test and Agglomerative Hierarchical Clustering method, we analyzed the WEF Global Competitiveness Index 2017–2018 of those countries whose multinational firms were included into the Forbes Global 2000 list of 2017. The findings highlighted the important role of home-MNEs as determinants of countries‘ competitiveness, however MNE-related contribution of different pillars and components of the Global Competitiveness Index vary, depending on the stage of competitiveness of the studied 58 countries.

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