Avoiding taxes: banks’ use of internal debt

Artikel

This paper investigates how multinational banks use internal debt to shift profits to low-taxed affiliates. Using regulatory data on multinational banks headquartered in Germany, we show that banks use this tax avoidance channel more aggressively than non-financial multinationals do. We find that a ten percentage points higher corporate tax rate increases the internal net debt ratio by 5.7 percentage points, corresponding to a 20% increase at the mean. Our study also takes into account the existence of conduit entities, which simply pass through financial flows. If conduit entities are systematically located in low-tax countries, previous studies may have underestimated the extent of debt shifting.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: International Tax and Public Finance ; ISSN: 1573-6970 ; Volume: 28 ; Year: 2020 ; Issue: 3 ; Pages: 717-745 ; New York, NY: Springer US

Klassifikation und Themen

• Klassifikation: Recht ; Business Taxes and Subsidies including sales and value-added (VAT) ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Multinational Firms; International Business
• Thema: Profit shifting ; Internal debt ; Multinational banks ; Taxation

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Reiter, Franz ; Langenmayr, Dominika ; Holtmann, Svea
• Ereignis: Veröffentlichung
• (wer): Springer US
• (wo): New York, NY
• (wann): 2020

Weitere Informationen

• DOI: doi:10.1007/s10797-020-09625-2
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ