Using IRS Data to Identify Income Shifting to Foreign Affiliates

2017 ◽  
Author(s):  
Lisa De Simone ◽  
Lillian F. Mills ◽  
Bridget Stomberg
Keyword(s):  
Income Shifting ◽  
Foreign Affiliates

Using IRS data to identify income shifting to foreign affiliates

2019 ◽  
Vol 24 (2) ◽  
pp. 694-730 ◽  
Author(s):  
Lisa De Simone ◽  
Lillian F. Mills ◽  
Bridget Stomberg
Keyword(s):  
Income Shifting ◽  
Foreign Affiliates

Income Shifting by NOL Firms When Loss Carry-Forward Period is Extended

2019 ◽  
Vol 44 (1) ◽  
pp. 39-70
Author(s):  
Hee-Yeon Sunwoo ◽  
Woon-Oh Jung
Keyword(s):  
Income Shifting

What's at Stake for the LDCs, Now that the Uruguay Round Talks have been Suspended? (The Distinguishedl Lecture)

1991 ◽  
Vol 30 (4I) ◽  
pp. 579-599
Author(s):  
Robert E. Baldwin
Keyword(s):  
Multinational Firms ◽  
Uruguay Round ◽  
National Policy ◽  
Trade In Services ◽  
Trade Negotiation ◽  
Multilateral Trade Negotiation ◽  
Industrial Countries ◽  
Goods And Services ◽  
Foreign Affiliates ◽  
Merchandise Trade

Until negotiations collapsed in early December, the Uruguay Round gave promise of being the most significant multilateral trade negotiation since 1947, when the General Agreement on Tariffs and Trade (GA TI) was implemented and tariffs levels of the industrial countries were sharply cut. There are at least three reasons for this conclusion. First, by agreeing at the outset to bring both agriculture and textiles under GATT discipline, the participants created the opportunity for both rich and poor agricultural exporting nations and relatively low-wage, newly industrializing LDCs to benefit significantly from GATT-sponsored trade negotiations. Prior to the Uruguay Round, the benefits to these countries of such negotiations had been limited, since these two sectors were excluded from any significant liberalization. Second, by agreeing to formulate new rules relating to trade in services, trade-related aspects of· intellectual property rights, and trade-related investment issues, members took an important step in modernizing the GATT. As economic globalization has accelerated, there is a growing realization that arms-length merchandise transactions, the traditional concern of the GATT, are only one aspect of the real-side economic relations of current concern to national policy-makers and the economic interests they represent Now international commercial activities also involve merchandise trade among multinational firms and their foreign affiliates, international trade in services among independent agents as well as among affiliated enterprises, foreign direct investment activities, production nf goods and services in foreign affiliates for sale either abroad or at home, international flows of technology, and temporary movements of labour across borders. Although the so-called new issues in the Uruguay Round do not cover all of these matters, they go a considerable way in making the GATT more relevant for dealing with the problems of increasing internationalization.

A Model of Multinational Income Shifting and an Application to Tax Planning with E-Commerce

2014 ◽  
Vol 36 (2) ◽  
pp. 27-53 ◽  
Author(s):  
Kenneth J. Klassen ◽  
Stacie K. Laplante ◽  
Carla Carnaghan
Keyword(s):  
Tax Planning ◽  
Investment Model ◽  
Income Shifting ◽  
Tax Rates ◽  
Foreign Investments ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Foreign Earnings ◽  
Joint Consideration ◽  
The U.S

ABSTRACT: This manuscript develops an investment model that incorporates the joint consideration of income shifting by multinational parents to or from a foreign subsidiary and the decision to repatriate or reinvest foreign earnings. The model demonstrates that, while there is always an incentive to shift income into the U.S. from high-foreign-tax-rate subsidiaries, income shifting out of the U.S. to low-tax-rate countries occurs only under certain conditions. The model explicitly shows how the firms' required rate of return for foreign investments affects both repatriation and income shifting decisions. We show how the model can be used to refine extant research. We then apply it to a novel setting—using e-commerce for tax planning. We find firms in manufacturing industries with high levels of e-commerce have economically significant lower cash effective tax rates. This effect is magnified for firms that are less likely to have taxable repatriations. JEL Classifications: G38, H25, H32, M41.

Security Analyst and Stock Market Efficiency in Anticipating Tax-Motivated Income Shifting

2006 ◽  
Vol 81 (1) ◽  
pp. 227-250 ◽  
Author(s):  
Philip B. Shane ◽  
Toby Stock
Keyword(s):  
Earnings Forecasts ◽  
Income Shifting ◽  
Market Prices ◽  
Tax Rate ◽  
Income Effects ◽  
Market Participants ◽  
Security Analyst ◽  
Market Inefficiency ◽  
Reported Earnings ◽  
Statutory Tax Rate

In the context of the statutory tax rate reductions enacted in the Tax Reform Act of 1986, this paper investigates the degree to which capital market participants anticipate and correctly interpret temporary income effects of tax-motivated income shifting. We find evidence consistent with financial analysts' earnings forecasts failing to anticipate earnings management that shifts income from fourth quarters in higher tax rate years to immediately following first quarters of lower tax rate years. The evidence suggests that this failure is not the result of a decision to ignore the income shifting, but rather an inability to recognize temporary components of reported earnings. We also find evidence that market prices do not fully reflect the temporary income effects of tax-motivated income shifting, and that analyst inefficiency explains about half of the market inefficiency. We interpret these inefficiencies as potentially important costs of tax planning that could limit the ability of public firm managers to implement otherwise optimal tax strategies.

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