Where Does Multinational Investment Go with Territorial Taxation? Evidence from the UK

Author/Editor:

Li Liu

Publication Date:

January 12, 2018

Electronic Access:

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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.

Series:

Working Paper No. 18/7

English

Publication Date:

January 12, 2018

ISBN/ISSN:

9781484337493/1018-5941

Stock No:

WPIEA2018007

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

49

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