Foreign taxes and the growing share of U.S. multinational company income abroad : profits, not sales, are being globalized

Resource Information

The work Foreign taxes and the growing share of U.S. multinational company income abroad : profits, not sales, are being globalized represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Foreign taxes and the growing share of U.S. multinational company income abroad : profits, not sales, are being globalized

Creator

• Grubert, H

Subject

• foreign source income
• income splitting
• MNE

Language

eng

Summary

The foreign share of the worldwide income of U.S. multinational corporations (MNCs) has risen sharply in recent years. Data from a panel of 754 large MNCs indicate that the MNC foreign income share increased by 14 percentage points from 1996 to 2004. The differential between a company's U.S. and foreign effective tax rates exerts a significant effect on the share of its income abroad, largely through changes in foreign and domestic profit margins rather than a shift in sales. U.S.- foreign tax differentials are estimated to have raised the foreign share of MNC worldwide income by about 12 percentage points by 2004. Lower foreign effective tax rates had no significant effect on a company's domestic sales or on the growth of its worldwide pre-tax profits. Lower taxes on foreign income do not seem to promote "competitiveness."

Citation source

In: National tax journal. - Washington. - Vol. 65 (2012),

Geographic coverage

North America

Language note

English