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Do corporate tax cuts reduce international profit shifting

Listed author(s):
  • Brandstetter, Laura
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    This paper analyzes whether a corporate tax cut reduces profit shifting to low-tax countries. I use firm-level data of 2,812 German corporations around the Business Tax Reform in 2008. Applying a difference-in-differences framework with a one-onone matching strategy, which compares earnings of multinational and domestic corporations, I do not find empirical evidence that even a 10 percentage points cut in the business tax rate leads to a reduction of profit shifting activities.

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    File URL: https://www.econstor.eu/bitstream/10419/96507/1/784943184.pdf
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    Paper provided by arqus - Arbeitskreis Quantitative Steuerlehre in its series arqus Discussion Papers in Quantitative Tax Research with number 162.

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    Date of creation: 2014
    Handle: RePEc:zbw:arqudp:162
    Contact details of provider: Web page: http://www.arqus.info/

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    1. repec:bla:joares:v:36:y:1998:i:2:p:209-229 is not listed on IDEAS
    2. Huizinga, Harry & Laeven, Luc & Nicodeme, Gaetan, 2008. "Capital structure and international debt shifting," Journal of Financial Economics, Elsevier, vol. 88(1), pages 80-118, April.
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    19. Buettner, Thiess & Overesch, Michael & Schreiber, Ulrich & Wamser, Georg, 2012. "The impact of thin-capitalization rules on the capital structure of multinational firms," Journal of Public Economics, Elsevier, vol. 96(11), pages 930-938.
    20. Shafik Hebous & Alfons Weichenrieder, 2010. "Debt financing and sharp currency depreciations: wholly versus partially-owned multinational affiliates," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 281-302, June.
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    24. Dworin, Lowell, 1990. "Transfer Pricing Issues," National Tax Journal, National Tax Association, vol. 43(3), pages 285-91, September.
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