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Tax attractiveness and the allocation of risk within multinationals

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  • Dinkel, Andreas

Abstract

This paper analyzes the impact of countries' tax attractiveness on the allocation of risk within multinational groups. Our dataset contains subsidiaries located in 32 European countries and owned by parents from 90 different countries globally. We show that tax symmetry positively influences the relative amount of risk allocated to subsidiaries. Both time and amount limitations of loss offset rules matter. Higher statutory corporate tax rates in the country of the subsidiary decrease the relative amount of risk taken.

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  • Dinkel, Andreas, 2015. "Tax attractiveness and the allocation of risk within multinationals," arqus Discussion Papers in Quantitative Tax Research 189, arqus - Arbeitskreis Quantitative Steuerlehre.
    • Handle: RePEc:zbw:arqudp:189
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    More about this item

    Keywords

    International taxation; Tax attractiveness; Location decision; Multinational enterprise; Risk allocation;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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