Foreign (in)direct investment and corporate taxation.(Report) Wamser, Georg

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Wamser, Georg
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Canadian Journal of Economics
Multinational Corporations; Foreign investments -- Taxation; Taxation
Academic; Trade
To authenticate to the full-text of this article, please visit this link: Byline: Georg Wamser (1) Keywords: H25; H23 Abstract: Abstract. Foreign investments of multinational firms are often complex in that they involve conduit entities. In particular, a multinational can pursue either a direct or an indirect investment strategy, where the latter involves an intermediate corporate entity and is associated with enhanced opportunities for international tax planning. As a consequence, in the case of indirect investments, the role of corporate taxation in destination countries may change. This paper investigates the effects of corporate taxation on foreign investment decisions of German multinationals, taking explicitly into account that firms choose in a first stage the investment regime (direct vs. indirect). The empirical findings, consistent with theoretical predictions, suggest that tax effects differ according to whether the investment is direct or indirect. Abstract (Spanish): Investissements (in)directs a l'etranger et fiscalite des entreprises. Les investissements a l'etranger des firmes plurinationales sont souvent complexes en ce sens qu'ils se font par des voies indirectes. En particulier, une firme plurinationale peut soit poursuivre une strategie directe ou indirecte d'investissement ou dans le second cas une entite corporative intermediaire est impliquee. Cette strategie est associee aux possibilites plus grandes de tirer profit d'une planification fiscale internationale. En consequence, dans le cas d'investissements indirects, le role de la fiscalite des entreprises dans les choix de destination peut changer. Ce texte analyse les effets de la fiscalite des entreprises sur les decisions d'investissement a l'etranger des multinationales allemandes, en tenant compte du fait que, dans une premiere etape, les firmes choisissent le regime d'investissement (i.e. investissement direct ou indirect). Les resultats empiriques sont consistants avec les predictions theoriques et suggerent que les effets fiscaux varient selon que l'investissement est direct ou indirect. Author Affiliation: (1)ETH Zurich
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