Consequences of the new UK tax exemption system: : Evidence from micro-level data

• Autores: Peter Egger, Valeria Merlo, Martin Ruf, Georg Wamser
• Localización: Economic journal, ISSN 0013-0133, Vol. 125, Nº 589, 2015, págs. 1764-1789
• Idioma: inglés
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• Resumen

  • Until 2009, the UK operated a system of worldwide taxation. Under this system, taxation of foreign income was deferred until repatriated as dividends, leaving UK-owned multinational firms the possibility of avoiding UK taxation by delaying dividend payments and keeping earnings abroad. In 2009, the UK switched to a system under which all foreign-earned income is exempted from taxation. We evaluate the effects of this reform on foreign affiliates of UK multinationals. Using an identification approach that quasi-randomises over the country of residence of the ultimate firm owners, we find that the reform significantly affected short-run repatriation behaviour.