The Role of Tax in Choice of Location of Intellectual Property

Walpole, Michael; Riedel, Nadine

doi:10.2139/ssrn.2522693

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“…Note that the sample size differs for the models presented in Columns (1) and (2) as patents only enter the sample if all inventors are located in non-tax haven economies, see above (and the definition of tax havens differs between the two sets of specifications).13 Including inventor country characteristics in the estimation model follows the notion that MNEs condition on the location of the R&D units (determined by historic group structures, the location of the multinational headquarters or other business considerations) when deciding on international tax avoidance schemes -which is consistent with anecdotal evidence, see e.g Walpole & Riedel (2014)…”

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confidence: 65%

Corporate Taxes, Patent Shifting and Anti-Avoidance Rules: Empirical Evidence

et al. 2018

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confidence: 65%

Corporate Taxes, Patent Shifting and Anti-Avoidance Rules: Empirical Evidence

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“…MNEs may obviously shift patent income to low-tax countries by relocating whole R&D units. Practitioners claim that this involves considerable costs, however (as many low-tax countries feature inferior public infrastructure and are relatively scarce in high-skilled labor relative to their high-tax counterparts, see, e.g., Walpole and Riedel 2014). Firms may hence transfer patent ownership only.…”

Section: Patent Shifting To Low-tax Countriesmentioning

confidence: 99%

Corporate Taxes, Patent Shifting, and Anti-avoidance Rules: Empirical Evidence

Baumann

Boehm

Knoll

et al. 2020

Public Finance Review

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We empirically assess international corporate tax avoidance by strategic location of innovative output. The analysis draws on the universe of patent applications to the European Patent Office from 1990 to 2006 linked with data on multinational entities (MNEs) in Europe. Four findings emerge: first, patent holdings are distorted toward low-tax countries. Second, patent location in low-tax countries is correlated with a geographic separation of research and development output and input. Third, MNEs systematically sort high-value (low-value) patents to low-tax (high-tax) countries. Fourth, the propensity to locate patent ownership in low-tax countries is significantly decreased if controlled foreign company rules are enacted in the MNE’s parent country. The tightening of transfer pricing legislation, in turn, exerts a weak negative effect on the location of patent ownership only.

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The Role of Tax in Choice of Location of Intellectual Property

Cited by 2 publications

References 0 publications

Corporate Taxes, Patent Shifting and Anti-Avoidance Rules: Empirical Evidence

Corporate Taxes, Patent Shifting and Anti-Avoidance Rules: Empirical Evidence

Corporate Taxes, Patent Shifting, and Anti-avoidance Rules: Empirical Evidence

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