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| Format: | Artículo Open Access |
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Wiley
2024
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| Online Access: | https://onlinelibrary.wiley.com/doi/10.1111/twec.13621 |
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| _version_ | 1867001909081014272 |
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| author | Malte Lüttmann |
| author_facet | Malte Lüttmann Malte Lüttmann |
| collection | Wiley Open Access |
| contents | Taxation of MNE profits in an R&D driven economy: Beneficial tax havens and minimum taxes Malte Lüttmann The World Economy AbstractResearch and development (R&D) by multinational enterprises (MNEs) generates substantial positive cross‐country spillovers. With R&D incentives primarily provided by the MNEs' host countries, these nations bear the entire cost of incentivising R&D but only reap a fraction of the benefits, resulting in inefficiently low R&D incentives and investment from a global perspective. Allowing MNEs to shift their profit to a tax haven shelters the firms' profit from foreign taxation and increases the net returns to R&D without reducing the domestic tax base. In this setting, tax havens can be welfare beneficial because they help to internalise the positive cross‐country spillovers of R&D. The optimal effective minimum tax balances a reduction in wasteful profit shifting and more efficient R&D incentives for MNEs. Regardless of the welfare effect of R&D, a strictly positive minimum tax is optimal for each country. Uncoordinated minimum taxes may be excessively high, if R&D investment has a strong impact on productivity. Under certain circumstances, IP boxes are a welfare‐improving substitute for tax havens. 10.1111/twec.13621 http://creativecommons.org/licenses/by-nc/4.0/ |
| doi_str_mv | 10.1111/twec.13621 |
| format | Artículo Open Access |
| id | wiley_oa_10_1111_twec_13621 |
| institution | Wiley Open Access |
| license_str_mv | http://creativecommons.org/licenses/by-nc/4.0/ |
| publishDate | 2024 |
| publisher | Wiley |
| record_format | wiley_oa |
| spellingShingle | Taxation of MNE profits in an R&D driven economy: Beneficial tax havens and minimum taxes Malte Lüttmann The World Economy Taxation of MNE profits in an R&D driven economy: Beneficial tax havens and minimum taxes Malte Lüttmann The World Economy AbstractResearch and development (R&D) by multinational enterprises (MNEs) generates substantial positive cross‐country spillovers. With R&D incentives primarily provided by the MNEs' host countries, these nations bear the entire cost of incentivising R&D but only reap a fraction of the benefits, resulting in inefficiently low R&D incentives and investment from a global perspective. Allowing MNEs to shift their profit to a tax haven shelters the firms' profit from foreign taxation and increases the net returns to R&D without reducing the domestic tax base. In this setting, tax havens can be welfare beneficial because they help to internalise the positive cross‐country spillovers of R&D. The optimal effective minimum tax balances a reduction in wasteful profit shifting and more efficient R&D incentives for MNEs. Regardless of the welfare effect of R&D, a strictly positive minimum tax is optimal for each country. Uncoordinated minimum taxes may be excessively high, if R&D investment has a strong impact on productivity. Under certain circumstances, IP boxes are a welfare‐improving substitute for tax havens. 10.1111/twec.13621 http://creativecommons.org/licenses/by-nc/4.0/ |
| title | Taxation of MNE profits in an R&D driven economy: Beneficial tax havens and minimum taxes |
| topic | The World Economy |
| url | https://onlinelibrary.wiley.com/doi/10.1111/twec.13621 |