Global Organizations and Taxes: An Analysis of the Dividend, Interest, Royalty, and Compensation Payments between U.S. Multinationals' Foreign Affiliates

Posted: 14 Jul 1998

See all articles by Julie Collins

Julie Collins

University of North Carolina at Chapel Hill

Douglas A. Shackelford

University of North Carolina Kenan-Flagler Business School; National Bureau of Economic Research (NBER)

Date Written: November 1995

Abstract

This study investigates the importance of multinational tax planning for global enterprises by examining cross-border payments of dividends, interest, royalties and compensation between commonly-owned foreign affiliates of U.S. multinationals. Using data from the multinationals' actual U.S. tax returns, we find dividends, royalties and sometimes interest are negatively correlated with the cumulative income and withholding taxes levied on cross-border transfers. We find no evidence that compensation payments are correlated with taxes. The findings are consistent with human capital contracts encountering more adverse non-tax considerations than equity, debt, and intangible property contracts.

JEL Classification: F21, F23, G15, G30, H25

Suggested Citation

Collins, Julie H. and Shackelford, Douglas A., Global Organizations and Taxes: An Analysis of the Dividend, Interest, Royalty, and Compensation Payments between U.S. Multinationals' Foreign Affiliates (November 1995). Available at SSRN: https://ssrn.com/abstract=2538

Julie H. Collins

University of North Carolina at Chapel Hill ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Douglas A. Shackelford (Contact Author)

University of North Carolina Kenan-Flagler Business School ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
919-962-3197 (Phone)
919-962-4727 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
1,595
PlumX Metrics