Where does multinational investment go with territorial taxation? Evidence from the UK

"In 2009, the United Kingdom changed from a worldwide to a territorial tax system, abolishing dividend taxes on foreign repatriation from many low-tax countries. This paper assesses the causal effect of territorial taxation on real investments, using a unique dataset for multinational affiliate...

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Bibliographic Details
Main Author: Liu, Li
Institution:ETUI-European Trade Union Institute
Format: TEXT
Language:English
Published: Washington, DC 2018
IMF
Subjects:
Online Access:https://www.labourline.org/KENTIKA-19396547124911147299-Where-does-multinational-inves.htm
Description
Summary:"In 2009, the United Kingdom changed from a worldwide to a territorial tax system, abolishing dividend taxes on foreign repatriation from many low-tax countries. This paper assesses the causal effect of territorial taxation on real investments, using a unique dataset for multinational affiliates in 27 European countries and employing the difference-in-difference approach. It finds that the territorial reform has increased the investment rate of UK multinationals by 15.7 percentage points in low-tax countries. In the absence of any significant investment reduction elsewhere, the findings represent a likely increase in total outbound investment by UK multinationals."
Physical Description:49 p.
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