The Resource Safe haven or earnings stripping rules : a prisoner's dilemma?

Safe haven or earnings stripping rules : a prisoner's dilemma?

Label
Safe haven or earnings stripping rules : a prisoner's dilemma?
Title
Safe haven or earnings stripping rules : a prisoner's dilemma?
Creator
Subject
Language
eng
Summary
Multinational firms use internal debt financing to shift profits from high-tax to low-tax countries. Therefore, governments restrict the deductibility of interest expenses by applying thin-capitalization rules (TCRs). TCRs fall into two main categories: safe haven rules (SHR) and earnings stripping rules (ESR). The article analyses the optimal TCR choice in a two-country tax competition model. The aurthors show that unilateral replacement of SHR by ESR imposes a negative profit shifting externality on the other country. This effect can explain the recently observed switch from SHR to ESR in many countries
Citation source
In: International tax and public finance. - New York. - Vol. 27 (2020), no. 1 ; p. 38-76
http://library.link/vocab/creatorName
Kalamov, Z.Y
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • thin capitalization
  • earnings stripping
  • safe harbour
  • profit shifting
Label
Safe haven or earnings stripping rules : a prisoner's dilemma?
Instantiates
Publication
Label
Safe haven or earnings stripping rules : a prisoner's dilemma?
Publication

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