57 Pages Posted: 30 Jan 2015
Date Written: January 21, 2015
The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends. We find that the reasons for maintaining or introducing dividend exemption systems varied greatly among them and do not necessarily apply to the United States. Moreover, classification of tax systems as worldwide or territorial does not adequately capture differences in how countries tax foreign-source income.
Keywords: International taxation, multinational corporations, territorial taxation, corporate taxation
JEL Classification: H20, H25, H87
Suggested Citation: Suggested Citation
Altshuler, Rosanne and Shay, Stephen E. and Toder, Eric J., Lessons the United States Can Learn from Other Countries’ Territorial Systems for Taxing Income of Multinational Corporations (January 21, 2015). Available at SSRN: https://ssrn.com/abstract=2557190