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Do multinationals 'misuse' corporate income-tax holidays: an analysis based on Hungarian balance-sheet figures

Author

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  • Miklos Szanyi

    (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

Abstract

This paper has sought to check whether tax incentives provided by the Hungarian state have induced measurable profit transfers by multinational companies from spatial locations other than Hungary. The existence of such transfers may be very relevant to a discussion of tax policy and the ‘race to the bottom’ argument, as it would indicate that ‘unfair’ tax measures not only divert multinational investment from developed countries, but generate measurable profit transfers for taxavoidance purposes, from these countries to low-tax locations and tax havens. This may be the case even though some profit-transfer measures (e.g. transfer pricing) are internationally regulated.

Suggested Citation

  • Miklos Szanyi, 2005. "Do multinationals 'misuse' corporate income-tax holidays: an analysis based on Hungarian balance-sheet figures," IWE Working Papers 164, Institute for World Economics - Centre for Economic and Regional Studies.
    • Handle: RePEc:iwe:workpr:164
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    File URL: https://vgi.krtk.hu/publikacio/no-164-2005-12/
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    References listed on IDEAS

    as
    1. Charles B. Blankart, 2002. "Steuern als Preise - Eine finanzwissenschaftliche Untersuchung mit einer Anwendung auf die EU-Zinsbesteuerung," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(I), pages 19-38, March.
    2. Gabor Hunya, 2000. "International Competitiveness Impacts of FDI in CEECs," wiiw Research Reports 268, The Vienna Institute for International Economic Studies, wiiw.
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