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Corporate Taxation of Foreign Direct Investment Income 1991-2001

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  • Kwang-Yeol Yoo

Abstract

This paper constructs indicators of tax burden on FDI in order to review their trends and cross-country patterns. Over the 1990s, the overall tax burden on inward FDI (measured by the effective marginal tax rates) fell by 8 percentage points, reflecting corporate tax reforms in some OECD countries. Nevertheless, a large variation across host countries still remains. With the effective tax rates on inward FDI differing across host countries by as much as 28 percentage points for marginal FDI and by as much as 21 percentage points for infra-marginal FDI in 2001, a cross-country comparison of tax burden indicators shows that, irrespective of the tax burden indicators chosen, Canada, Iceland and Japan are persistently ranked as high-tax host countries over the 1990s. It is also found that there is more variation in the tax burdens faced by a parent company operating in different host countries than in the tax burdens faced by subsidiaries from different home countries operating in the ... Imposition sur les sociétés du revenu de l'investissement direct étranger (l'IDE) Cette étude construit les indicateurs de la charge fiscale sur l’IDE afin d’examiner leurs tendances et les caractéristiques par pays. Pendant les années 90, la charge fiscale globale sur les entrées d’IDE (mesurée par les taux marginaux effectifs d'imposition) a diminué de 8 points de pourcentage, reflétant des réformes de l'imposition du revenu des sociétés dans certains des pays de l’OCDE. Néanmoins, une grande diversité demeure entre pays d'accueil. Les taux marginaux effectifs d'imposition sur les entrées d’IDE différaient selon les pays d'accueil d’environ 28 points de pourcentage pour l’IDE marginal et d’environ 21 points de pourcentage pour l’IDE infra-marginal en 2001. Une comparaison internationale des indicateurs de charge fiscale montre que, quels que soient les indicateurs choisis, le Canada, l’Islande et le Japon figurent systématiquement parmi les pays d'accueil à forte fiscalité au cours des années 90. On a également pu constater que les charges fiscales auxquelles ...

Suggested Citation

  • Kwang-Yeol Yoo, 2003. "Corporate Taxation of Foreign Direct Investment Income 1991-2001," OECD Economics Department Working Papers 365, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:365-en
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    File URL: http://dx.doi.org/10.1787/218605563356
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    Cited by:

    1. Da Rin, Marco & Di Giacomo, Marina & Sembenelli, Alessandro, 2011. "Entrepreneurship, firm entry, and the taxation of corporate income: Evidence from Europe," Journal of Public Economics, Elsevier, vol. 95(9), pages 1048-1066.
    2. Willi Leibfritz & Paul O'Brien, 2005. "The French Tax System: Main Characteristics, Recent Developments and Some Considerations for Reform," OECD Economics Department Working Papers 439, OECD Publishing.
    3. Peter Egger & Simon Loretz, 2010. "Homogeneous Profit Tax Effects for Heterogeneous Firms?," The World Economy, Wiley Blackwell, vol. 33(8), pages 1023-1041, August.
    4. Daniela Federici & Valentino Parisi, 2014. "Corporate Taxation and Exports: Evidence from Italian Firm-Level Data," Review of Economics & Finance, Better Advances Press, Canada, vol. 4, pages 23-38, May.
    5. Tehmina S. Khan & John Norregaard, 2007. "Tax Policy; Recent Trends and Coming Challenges," IMF Working Papers 07/274, International Monetary Fund.
    6. Stacie Beck & Alexis Chaves, 2011. "The Impact Of Taxes On Trade Competitiveness," Working Papers 11-09, University of Delaware, Department of Economics.

    More about this item

    Keywords

    effective marginal (inframarginal) tax rates; entrées (sorties) IDE; IDE marginal (infra-marginal); inward (outward) FDI; marginal (infra-marginal) investment; planification fiscale; retenues à la source; taux marginaux (effectifs) d'imposition; tax planning; traitement des revenus de source étrangère; treatment of foreign-source income; withholding tax;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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