Business, Management and Accounting
3 years ago

Tax treaties' tax credits lead to welfare losses for residence countries.

1 view
SSRN Electronic Journal
Tax Treaties and the International Allocation of Production: The Welfare Consequences of Tax Credits
Nigar Hashimzade, Gareth D. Myles

Paper Summary

Tax treaties give tax credits to multinational companies to avoid double taxation and encourage investment. These credits affect welfare through efficiency and distribution channels, benefiting source countries more than residence countries. Source countries may need to lower tax rates to offset the impact on residence countries.

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