Home or away? Profit shifting with territorial taxation

Earnings Management of Chinese Listed Multinational Corporations

“…On the other hand, Chinese tax law requires that when income is repatriated from countries with lower tax rates than the host country, an additional tax based on the tax rate difference must be paid (Kohlhase and Pierk, 2020). Because of this, MNCs are unable to succeed in avoiding paying income taxes by splitting their revenues between corporate headquarters and foreign subsidiaries (Kohlhase and Pierk, 2020;Langenmayr and Liu, 2023). The possibility for MNCs to avoid taxes, particularly through tax havens, has shrunk due to greater cross-border tax supervision and global tax system reform (Garcia-Bernardo et al, 2022).…”

The Effect of Foreign Dividend Exemption on Profit Repatriation through Dividends, Royalties, and Interest: Evidence from Japan

“…In general, if the respondents indicate zeros on the form, they are recorded as missing values from 2009. 18 As a result, the number of missing values for dividends, royalties, and the total payment surged from 2010 onwards. 19 The problem is that we cannot determine whether the missing values are in fact zero payments.…”

Minimum Global Tax: Winners and Losers in the Race for Mergers and Acquisitions

“…More recent literature has stressed further factors of cross-border capital flows, which are related to cross-border tax evasion, tax avoidance and transfer pricing activities and illegal, borderline, or even legal practices of international corporations that move capital across borders with the aim of 'optimising' their tax burdens (Zucman, 2015(Zucman, , 2014Johannesen and Zucman, 2014;Hebous and Johannesen, 2021;Tørsløv et al, 2023). Profit shifting has increased in countries that have abolished taxation of profits earned abroad, such as (Langenmayr and Liu, 2023). In response, some countries have implemented rules on controlled foreign corporations in their tax systems (Clifford, 2019;Fonseca et al, 2023), which limit the extent of tax avoidance practices, particularly when adopted cooperatively Haufler et al (2018); Amendolagine et al (2021).…”