Project Details
Projekt
Coordination Funds
Applicant
Professor Dr. Georg Wamser
Subject Area
Economic Policy, Applied Economics
Term
since 2019
Project identifier
Deutsche Forschungsgemeinschaft (DFG) - Project number 388587616
The proposed research unit will deal with the behaviour of multinational corporations (MNCs) in the context of international tax institutions. Due to the activities of multinational corporations, the role of international tax law has become a central policy concern in recent years. Especially the profit-shifting activities of MNCs comes at the cost of countries' tax revenues. Google Inc. or Starbucks are just two out of many examples where big players engage in aggressive tax-avoidance strategies. How tax policy should deal with profit shifting and tax avoidance of multinational corporations is a complex question. The OECD/G20 BEPS project recommends a variety of policy actions to address tax avoidance and base erosion with the goal that profits are taxed where economic activities generating the profits are performed and where value is created. The objective of this RU is to provide a comprehensive analysis of the effects of international tax rules on intended and unintended margins of multinational firm activity and their consequences for economic outcomes and welfare. Our goal is to bring the literature forward by making fundamental contributions – including the generation of an extensive dataset on tax rules suitable for quantitative research – and to inform policymakers' decisions. In order to achieve this objective, we need to develop a deeper understanding of how different taxes and avoidance rules affect MNCs at the core of their businesses. The multi-dimensionality and complexity of both tax law and the organisation of MNCs call for accurate knowledge of the tax rules determining MNC behaviour, and for an integrative methodological approach. The particular subprojects are called “Measuring tax incentives” (Project 1), “The effects of tax incentives and anti-tax-avoidance rules on the allocation of profits and real investment activity” (Project 2), “Taxing multinational firms: a developing country perspective” (Project 3), “Management behaviour, tax institutions, and tax avoidance of multinational firms” (Project 4), “Taxation and firm productivity” (Project 5) and “CEO Taxation” (Project 7). Due to the interdisciplinarity of the group and the complementarity of qualifications of its members (business and economics; theory and empirical methods), this RU is able to deliver a better understanding of the different ways in which tax legislation affects MNC behaviour, and the consequence of these effects for the global allocation of real investment, profits, and different types of assets. Given today’s challenges for the functioning of national tax systems, this is of pivotal importance for future tax policy.
DFG Programme
Research Units
