IDEAS home Printed from https://ideas.repec.org/h/spr/prbchp/978-3-031-22749-3_5.html
   My bibliography  Save this book chapter

Debt and Taxes as Value-Added Factors for Multinational Enterprises: International Policy Implications

In: Advances in Empirical Economic Research

Author

Listed:
  • Juan José Durán-Herrera

    (Universidad Autónoma de Madrid)

  • Prosper Lamothe-Fernández

    (Universidad Autónoma de Madrid)

Abstract

The international heterogeneity of tax regimes among countries, where multinational firms operate, and the generally accepted principle that interest on debt is treated as a deductible cost for tax purposes, reduces corporate benefits, and consequently, the amount of taxes paid has consequences on the allocation of resources: the firm obtained a lower cost of capital (and potentially could invest more), the shareholders return increases (as well as executives paid), the income of Tax Authorities diminished, and a greater inequality results (given the high concentration of wealth and MNE capital ownership). A global economy needs a simpler and more transparent and equivalent corporate tax system among countries that only can be reached through international cooperation. Globalization as well as the process (evolution) of the digital economy have contributed to tax competition (About 60% of profits of MNE are the results of tax competition (IMF, World Economic Outlook, 2022)) that reduces income taxes of countries.

Suggested Citation

  • Juan José Durán-Herrera & Prosper Lamothe-Fernández, 2023. "Debt and Taxes as Value-Added Factors for Multinational Enterprises: International Policy Implications," Springer Proceedings in Business and Economics, in: Nicholas Tsounis & Aspasia Vlachvei (ed.), Advances in Empirical Economic Research, chapter 0, pages 69-87, Springer.
    • Handle: RePEc:spr:prbchp:978-3-031-22749-3_5
    DOI: 10.1007/978-3-031-22749-3_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:prbchp:978-3-031-22749-3_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.