Suchergebnisse

In a globalized world, US and European firms compete with each other. Therefore, it is of particular interest whether one group faces a competitive (dis)advantage due to tax differentials. This thesis aims to provide a better understanding of tax differentials and the determinants therof between US and European firms. The first essay "Alternative Effective Tax Rate Measures – An Assessment of Differences between US and European Firms" is a single author paper. The paper evaluates the information content of five different ETR measures as proxies for tax expenditures and demonstrates their differences between US and European firms. The second essay "Do US Firms Pay Less Tax than their European Peers? On Firm Characteristics, Profit Shifting Opportunities, and Tax Legislation as Determinants of Tax Differentials" is co-authored by Michael Overesch and Georg Wamser. The essay builds on the first essay, as it uses different ETR measures to analyze the tax differentials between listed US and European firms. With a more detailed approach it further investigates whether tax differentials between US and European firms can be attributed to firm characteristcs, profit shifting opportunities and home country tax legislation. The final essay "The Cadbury Schweppes Judgment and its Implications on Profit Shifting Activities within Europe" is a single-author paper and analyzes the impact of amendments to European CFC rules on profit shifting activities of European-owned subsidiaries compared to US-owned subsidiaries.

Using pairs of similar US and European firms listed on the S&P500 or StoxxEurope600, we examine effective tax differentials between US multinational corporations (MNCs) and their European peers. We show that statutory tax rates and profit shifting opportunities are important determinants of effective tax rates. Our findings suggest substantially lower total tax payments of US MNCs after the 2017 US tax reform. Based on past reforms of Controlled Foreign Company (CFC) rules and of the principle of worldwide taxation, we confirm that international tax legislation affects effective tax expenses. We also provide evidence for heterogeneity in firm responses: MNCs with profit shifting opportunities benefit most from more-lenient CFC rules.