Tax-Treaty Effects on Foreign Investment: Evidence from European Multinationals

Marques, Mário; Pinho, Carlos

doi:10.1628/001522114x685474

Cited by 22 publications

(13 citation statements)

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“…Ireland had the lowest tax burden, with a mean ETR of 19.03%. Consistent with studies by Abbas and Klemm (2013), Buijink et al (2002), and Marques and Pinho (2014), our findings show a lack of tax harmonization across the EU-15 member states between 2006 and 2014.…”

Section: Conclusion Regarding the Etrsupporting

confidence: 90%

“…Scholars have also compared European and non-European countries (Chennells and Griffith, 1997;Jacobs and Spengel, 2000), and have conducted comparisons of 50 and 83 countries (Abbas and Klemm, 2013;Chen and Mintz, 2011, respectively). Studies of the tax burden in Europe include studies by Buijink et al (2002), Cuenca-García et al (2013), Devereux et al (2008), Marques and Pinho (2014), and Overesch and Rincke (2011).…”

Section: Introductionmentioning

confidence: 99%

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Tax Incentives: An Effective Mechanism to Achieve EU Harmonization?

Contell¹,

Serrano²,

Serer³

2020

JBAFP

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For decades, European Union (EU) wide corporate tax harmonization has been sought to eradicate business relocation for tax reasons. It is hoped that this harmonization will ensure that companies pay taxes in the countries where they operate. One mechanism that countries use to achieve this harmonization is tax incentives. Yet each country establishes its own incentive structure, according to its statutory tax rate. This study analyzes the effective tax burden in the initial 15 EU member states between 2006 and 2014 to identify significant differences that prevent tax harmonization across these countries. The statutory and effective tax rates are used to evaluate the tax burden. The net tax incentives and disincentives are also considered. The analysis shows that between 2006 and 2014, these 15 member states used tax incentives to close the gaps among these countries’ tax burdens. Countries with above-average effective tax rates offered greater tax incentives than countries with below-average effective tax rates. However, though these tax policies reduced the gap in the tax burden, harmonization of the effective tax rate was not achieved during the study period.

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Section: Conclusion Regarding the Etrsupporting

confidence: 90%

Section: Introductionmentioning

confidence: 99%

Tax Incentives: An Effective Mechanism to Achieve EU Harmonization?

Contell¹,

Serrano²,

Serer³

2020

JBAFP

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“…The authors argue that the positive effect of DTTs comes from the reduced investment uncertainty. Marques and Pinho (2014) analyse the extent to which tax treaties influence the number of new foreign subsidiaries incorporated by European multinationals between 2000 and 2009. Using two measures of tax treaties-a binary variable and a measure of crossborder effective tax rate-they provide evidence that tax treaties induced a positive and significant impact on the number of foreign subsidiaries incorporated in the last decade.…”

Section: Introductionmentioning

confidence: 99%

“…In essence, micro-level studies are either better able to control for the tax environment in which DTTs occur (e.g. Marques and Pinho 2014, ), or the treaty impact in the presence of firm heterogeneity (Davies et al 2009;Blonigen et al 2014). Among these, our work resembles the Marques and Pinho (2014) study, which takes into account the effect of DTTs on the combined effective tax rates.…”

Section: Introductionmentioning

confidence: 99%

On the relevance of double tax treaties

Petkova

Stasio

Zagler

2019

Int Tax Public Finance

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This paper investigates the effects of double tax treaties (DTTs) on foreign direct investment (FDI) after controlling for their relevance in the presence of treaty shopping. DTTs cannot be considered a bilateral issue, but must be viewed as a network. We define tax distance as the cost of channelling corporate income from one country to another and, by considering treaty shopping through intermediate jurisdictions, we calculate the shortest (i.e. the cheapest) distance between any two countries. We show that relevant tax treaties—which reduce the direct tax distance both over domestic law and the entire existing treaty network—will increase FDI by about 18%.

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“…Three recent studies find no effect of treaties on FDI(Baker, 2014;Daniels, O'Brien, and von der Ruhr, 2015; Beer and Loeprick, 2018); three find a positive effect(Marques and Pinho, 2014; Van 't Riet and Lejour, 2017;Hong 2018).2 Under a PPT, broadly speaking, treaty benefit is denied if one of the main purposes of an arrangement is to obtain those benefits; an LOB seeks to limit tax treaty benefits to genuine residents of the other contracting state.3 Advanced economies seem to opt for the (more complex to enforce) PPT, rather than the LOB, far more often than emerging economies.©International Monetary Fund. Not for Redistribution…”

mentioning

confidence: 98%

Corporate Taxation in the Global Economy

2019

Policy Papers

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Tax-Treaty Effects on Foreign Investment: Evidence from European Multinationals

Cited by 22 publications

References 0 publications

Tax Incentives: An Effective Mechanism to Achieve EU Harmonization?

Tax Incentives: An Effective Mechanism to Achieve EU Harmonization?

On the relevance of double tax treaties

Corporate Taxation in the Global Economy

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