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Tax policy and multinational firms

BEA521 Tax policy and multinational firms

Autumn 2019

  • Topics

    This course analyzes the strategic choices of multinational firms with respect to the international tax environment, and the responses of governments to limit international tax arbitrage. The lectures introduce students to the recent theoretical and empirical research on tax policy towards multinational firms, covering both the real investment decisions (FDI) and the profit-shifting decisions of multinationals. Along the way, the institutional setup for the taxation of multinational firms will be introduced and current policy proposals such as the OECD's "Base erosion and profit shifting" (BEPS) initiative will be discussed.

    Lecture 1: Capital mobility and tax competition: Basic theory Lecture 2: Capital tax competition: Empirical evidence Lecture 3: Multinationals┬┐ investment choices and tax competition: Theory Lecture 4: Taxes and foreign direct investment: Empirical evidence Lecture 5: Profit shifting in multinational firms: Empirical overview Lecture 6: National policies against profit shifting: Theory and evidence Lecture 7: Profit shifting and tax havens Lecture 8: Current policy issues: BEPS and patent boxes

  • Learning outcome

    Knowledge

    Upon successful completion of the course, the student is able to

    • assess and interpret advanced-level theories and empirical evidence on multinationals┬┐ tax arbitrage activities and international tax competition.
    • identify different responses of multinational firms operating in an international tax environment.
    • compare different empirical approaches of how to quantify multinationals┬┐ responses to international tax differentials.

    Skills

    Upon successful completion of the course, the student is able to

    • employ an analytical toolset that enables advanced, high-quality research on issues of international corporate taxation and tax competition.
    • evaluate and critically compare different empirical approaches in this research field.
    • develop empirical or theoretical research questions that relate to the international tax strategies of both firms and governments.

    General competence

    Upon successful completion of the course, the student is able to

    • critically reflect on advanced theories of how countries try to attract foreign direct investment and profits of multinational firms.
    • present the essentials of a current research article in the field and work out its contribution to the academic literature as well as to current policy debates.
    • present and discuss own research on international corporate taxation in an academic forum.

  • Teaching

    The course consists of 8 lectures (90 minutes each) and 2-4 sessions with student presentations, depending on the number of participants.

  • Recommended prerequisites

    Graduate-level courses in microeconomic theory and econometrics

  • Requirements for course approval

    Student presentations in groups (2 or 3) that will last between 30 and 45 minutes (approved/not approved).

  • Assessment

    The final grade will consist of a 1 hour written school exam (100%). The exam language is English and all answers need to be given in English as well.

  • Grading Scale

    Pass-Fail

  • Literature

    Devereux, M., Loretz, S. (2013): What do we know about corporate tax competition? National Tax Journal 66(3), 745-773.

    Keen, M., Konrad, K. (2013): The theory of international tax competition and coordination. Handbook of Public Economics, Volume 5, Ch. 5, 257-328.

Overview

ECTS Credits
5
Teaching language
 English
Semester

Autumn. Offered autumn 2019.

Course responsible

Professor Andreas Haufler, Department of Business and Management Science.