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@article{ Overesch2010, title = {Corporate tax planning and thin-capitalization rules: evidence from a quasi-experiment}, author = {Overesch, Michael and Wamser, Georg}, journal = {Applied Economics}, number = {5}, pages = {563-573}, volume = {42}, year = {2010}, doi = {https://doi.org/10.1080/00036840701704477}, urn = {https://nbn-resolving.org/urn:nbn:de:0168-ssoar-242033}, abstract = {This paper investigates tax-planning behaviour by means of inter-company finance and the effectiveness of government countermeasures via thin-capitalization rules. A simple theoretical model which considers the financing decision of a multinational company is used to obtain empirical implications. The empirical analysis, based on German inbound investment data from 1996 to 2004, confirms a significant impact of tax-rate differentials on the use of inter-company debt. The effectiveness of the German thin-capitalization rule is tested by using legal amendments as natural experiments. The results suggest that thin-capitalization rules induce significantly lower internal borrowing. Hence, tax planning via internal finance is effectively limited by thin-capitalization rules.}, }