Suchergebnisse

We present a new model of tax induced transfer pricing as an alternative to the oft-used concealment model. Inspired by interviews with practitioners, we consider a large multinational firm which is audited by the tax authority in the high-tax location. When this country adjusts the transfer prices proposed by the firm, the low-tax location may dispute this decision and initiate negotiations. Since negotiations are costly, the high-tax location sets a transfer price that prevents the low-tax location from entering negotiations. We compare this model's predictions to those of the concealment model. The negotiation model replicates the predictions on the tax rate effects on transfer pricing, while adding new predictions. Profit shifting is expected to fall in the high-tax country's bargaining power and to rise in firm profits and domestic firm ownership in both countries. Most importantly, profit shifting occurs even if tax enforcement is perfect. We analyze the effects of an introduction of a common consolidated corporate tax base with formula apportionment and conclude that the negotiation model may change the perspective on such a policy. Specifically, strong countries with large bargaining power may find this reform unappealing.

Advance pricing agreements (APAs) determine transfer prices for intra-firm transactions in advance. This paper interprets these contracts as a means to overcome a hold-up problem that occurs because governments cannot commit to non-excessive future tax rates. In addition, with private information, just as in practice, our APAs will be complex and require lengthy negotiations. Nevertheless, implemented APAs lead to a Pareto improvement even when all agents are risk neutral. However, not all efficient APAs are concluded in equilibrium. International agreements to avoid double taxation will likely reduce the number of realized APAs.

When a region successfully attracts a large firm by offering tax concessions, outright subsidies etc., the firm often commits itself to performance targets in terms of investment or employment. This paper interprets these contractually fixed targets as a consequence of incomplete information. It analyzes a model of two regions which compete for a large firm assuming that the firm's characteristics are ex-ante unknown. We consider direct mechanisms that induce truthful reporting of the firm's type as well as simpler bidding strategies. We find that, first, performance targets are an equilibrium outcome if information is incomplete. Second, these performance targets often induce employment distortions (overemployment in the most plausible case). Third, when the competing regions differ, the winning region may gain from the fact that information is incomplete, i.e. its payoff is greater than it would be under complete information. Finally, when the governments' sets of instruments are restricted to lump-sum payments, simple tax rebates and wage subsidies, incomplete information has no efficiency cost. This implies that restricting both regions' sets of policy instruments may improve efficiency.

If conventional instruments of strategic trade policy are unavailable, the system of foreign profit taxation and transfer price guidelines may serve as surrogate policy instruments. In this paper, I consider a model where firms from two countries compete with each other on a third market. I analyze optimal policy choices of the firms' residence countries aiming at strategically manipulating the competitivity of their firms on the third market. I show that, as has recently been claimed, countries prefer the tax exemption system over the tax credit system if transfer prices for headquarter services to the affiliate are close to the headquarter's variable cost and if the third country's tax rate is low (i.e., if there is a large tax differential between both locations within the firm). However, if transfer prices are high and the tax rate in the third market country is sufficiently close to the residence country's tax rate, I show that the tax credit system is an optimal tax policy choice for both countries. From a policy perspective, the view that the tax exemption system is generally the best policy response if domestic firms' competitiveness is a policy goal has to be qualified.

Recent empirical studies find that foreign direct investment (FDI) by a multinational firm is not associated with a reduction of the firm's domestic activities. As it is often argued, this finding may imply that a country should not tax the firm's foreign profit income since this reduces foreign investment without benefitting the domestic economy. The paper analyzes this argument using a model with heterogeneous multinational firms which serve a foreign market through exports or FDI. If a firm switches from exporting to FDI, domestic activity and tax payments may decrease, stay constant or even rise due to intra-firm trade. It turns out that, in all three cases, the optimal tax system implies full taxation after deduction of foreign tax payments. If the country accounts for the effects of its policy on the foreign price level, the case for taxing foreign income becomes even stronger. From a global point of view, the nationally optimal tax rate on repatriated foreign profits is inefficiently high. In contrast to the standard literature, the globally optimal tax system requires a lower tax rate than under the tax credit system which, under certain circumstances, may imply exempting foreign income from tax.

In this paper, we consider optimal tax enforcement policy in the presence of profit shifting towards tax havens. We show that, under separate accounting, tax enforcement levels may be too high due to negative fiscal externalities. In contrast, under formula apportionment, tax enforcement is likely to be too low due to positive externalities of tax enforcement. Our results challenge recent contributions arguing that, under formula apportionment, there is a tendency towards inefficiently high levels of (effective) tax rates.

In diesem Beitrag werden biografische und familiale Folgen von Zugehörigkeit zu und Ausschluss aus der Elite autoritärer Regime am Beispiel der Fallstudie einer modernitätsorientierten Familie im haschemitischen Königreich Jordanien analysiert. Es wird aufgezeigt, welchen Beitrag biografietheoretische und figurationssoziologische Perspektiven zur Untersuchung der Geschichte postkolonialer Staaten leisten können.

I consider a continuum of multinational enterprises (MNEs), which differ in profitability. MNEs employ capital, shift profit to tax havens and may relocate their production facilities to other countries. Source countries provide public inputs and levy taxes. I derive optimal policy choices for different government objectives (to maximize tax revenue, national income or the representative household's utility) allowing for an unrestricted set of tax policy instruments — in contrast to most existing work on corporate taxation. With observable productivity types, source governments set type-dependent lump-sum taxes and attain the first-best allocation. With unobservable productivity types, the optimum source-based tax system consists of a small lump-sum tax (driving low-profit types out of the market) and positive marginal taxes on reported profit. Optimal marginal tax rates on capital inputs are positive if more profitable firms employ more capital. Optimal public inputs are lower than in the first best if they are of higher value to more profitable firm types. I use a sufficient statistics approach (following Saez 2001) to express optimal tax and input choices as functions of elasticities of observable choice variables. Finally, I use the model to evaluate tax policy measures, e.g. the introduction of an effective minimum tax on profits in tax havens, and to derive the welfare properties of tax competition with an unrestricted set of tax instruments.

With its diachronic focus on socio-historical processes and life and family histories, sociological biographical research can analyse the emergence of new spatial figurations. It does so from the perspective of the experiences of individuals in their changing belonging to different groupings at different times. In this article, I investigate changing (meanings of) spaces in the Bilad ash-Sham region (roughly today's Lebanon, Israel, Palestine, and parts of Jordan and Syria). I discuss how the process of the formation of nation-state borders and citizenship in the twentieth century transformed translocal relations into transnational networks, combined spatial diffusion with (forced) emplacement in nation-states, and initiated accelerating national closure processes. At the family level, the growing relevance of citizenship and borders in the region came about with knowledge of, and family dialogue about, border crossing, and the increasing spatial diffusion of the family, as well as intrafamilial discussions on the "value" of different nation-states. These processes affected all families in the Bilad ash-Sham region to a varying extent. They constitute a type of figuration of space that influenced the gradual formation of societies within the framework of nation-states defined by colonial rulers. As an example, I will discuss the regional family history of a Syrian refugee in Amman, Jordan.

In this article, I introduce a research perspective which combines the analysis of family and life histories with the analysis of places. I define the terms place and emplacement as being processual and spatial at the same time, aiming at a combination of the sociology of space and biographical research. I detail how the identification of places and emplacement can be done practically in the research process by using the conception of heuristic research spaces. On the basis of a case study taken from my empirical research in Jerusalem's Old City, I highlight the analytical advantages of including a consideration of places and emplacement.