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%T Corporate tax planning and thin-capitalization rules: evidence from a quasi-experiment %A Overesch, Michael %A Wamser, Georg %J Applied Economics %N 5 %P 563-573 %V 42 %D 2010 %K Corporate Income Tax; Multinationals; Thin-Capitalization Rule; Difference- in-Differences Estimation; Firm-Level Data %= 2011-04-19T12:00:00Z %~ http://www.peerproject.eu/ %> https://nbn-resolving.org/urn:nbn:de:0168-ssoar-242033 %X 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. %C USA %G en %9 journal article %W GESIS - http://www.gesis.org %~ SSOAR - http://www.ssoar.info