Investment and Financing Strategy of a Multinational Enterprise under alternative tax designs
(2012) CESifo Area Conference on Public Sector Economics — Location: Munich (Germany) (12.April.2012)
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- Abstract
- This paper investigates the consequences of a series of alternative international tax designs on the strategy of a multinational enterprise regarding the cross border distribution of its investment and the choice of its financing behavior. We start with a world where no international tax rules are at work. Then we successively introduce (i) the rules provided by the OECD Model Tax Convention, (ii) the EU Parent-Subsidiary Directive of July 23, 1990; and (iii) a combination of Allowance for Corporate Equity (ACE) and Comprehensive Business Income Tax (CBIT). Finally, we leave systems based on Separate Accounting (SA)aside and turn to Consolidation and Formulary Apportionment (C&FA) adopted either by all the jurisdictions at work in the model, or by a sole subset of them within the framework of an Enhanced Cooperation Agreement (ECA).
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Gérard, M., & Princen, S. (2012). Investment and Financing Strategy of a Multinational Enterprise under alternative tax designs. CESifo Area Conference on Public Sector Economics, Munich (Germany). https://hdl.handle.net/2078.5/187594