Taxation and Corporate Group Structure – Evidence from a Sample of European Multinationals
Schmalenbach Business Review, Vol. 64, October 2012, pp. 254-280
27 Pages Posted: 1 Dec 2012
Date Written: 2012
Abstract
We empirically analyze the influence of tax considerations on the structure of investments of a parent company based in one EU member state that holds subsidiaries in a different member state. We show that group taxation, deductibility of financing expenses, or participation write-downs and additional taxes on intragroup dividends may factor into the parent company’s decision on the structure of investments as tax parameters. We find empirical evidence that a vertical structure with a pure holding interposed is implemented more often if a domestic parent entity is required for the formation of a tax group, the semi-elasticities being 0.568 and -0.343.
Keywords: Corporate Group Structure, Corporate Income Tax, Firm-Level Data, Multinationals
JEL Classification: F23, H25, K34
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Taxes, Organizational Form, and the Deadweight Loss of the Corporate Income Tax