Template-Type: ReDIF-Paper 1.0

Author-Name: Matthias Dischinger
Author-X-Name-First: Matthias
Author-X-Name-Last: Dischinger


Author-Name: Nadine Riedel
Author-X-Name-First: Nadine
Author-X-Name-Last: Riedel

Title: Corporate Taxes, Profit Shifting and the Location of Intangibles within Multinational Firms
	
Abstract: Intangible assets are one major source of profit shifting opportunities due
to a highly intransparent transfer pricing process. Our paper argues that
multinational enterprises (MNEs) optimize their profit shifting strategy by
locating shifting–relevant intangible property at affiliates with a low statutory
corporate tax rate. Using panel data for European MNEs and controlling for
unobserved time–constant heterogeneity between affiliates, we find that the
lower a subsidiary’s tax rate relative to other affiliates of the multinational group
the higher is its level of intangible asset investment. This effect is statistically
and economically significant, even after controlling for subsidiary size and
accounting for a dynamic intangible investment pattern.
Length:  33 pages
Creation-Date:  2008-06
File-URL: http://www.bgpe.de/texte/DP/060_dischinger_riedel.pdf
File-Format: Application/pdf
File-Function: First version, 2008
Number: 060
Classification-JEL: H25, F23, H26, C33
Keywords: corporate taxation, multinational enterprise, profit shifting, intangible
assets, micro level data
Handle: RePEc:bav:wpaper:060_dischinger_riedel