capital gains, taxation of carried interest, deductibility of interest expenses and management fees, withholding taxes on interest and dividends, and the applicability of anti-avoidance rules. Moreover, an import issue concerns the question of whether the investment in a private equity fund may create a permanent establishment (PE) for foreign investors. Cf. G. Letizia, International Tax Issues in Relation to Cross-Border Investment Funds , 43 Intertax 8/9, p. 526-530 (2015) and E. Cacciapuoti, Private Equity Funds, Permanent Establishments and Italian Operations
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Büttner T., Overesch M., Schreiber U. and Wamser G., 2012. The Impact of Thin-capitalization Rules on the Capital Structure of Multinational Firms. Journal of Public Economics 96, 930-938.
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Büttner T. , Overesch M. and Wamser G. (2014), Anti Profit-Shifting Rules and ForeignDirectInvestment. CESifo Working Paper No. 4710, Munich.
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Belgium’s treaties (such as withholding tax rates) are consistent with international conventions and in line with those in many other tax treaties.
In the past, Belgium has used various targeted tax incentives to attract foreigndirectinvestment from MNCs, such as the regime for coordination centers before 2006, the NID after 2006 (see below), the innovation box, and specific rulings such as an excess profit tax ruling. This strategy has been relatively successful in the past. For instance, the inbound stock of FDI is approximately 100 percent of GDP in 2015 (per the
“Economic Analysis of Law” Fourth Boston Little Brown
Preuss, Lutz. 2012. “Responsibility in Paradise? The Adoption of CSR Tools by Companies Domiciled in Tax Havens.” Journal of Business Ethics 110 (1): 1-14. 10.1007/s10551-012-1456-6 Preuss Lutz 2012 “Responsibility in Paradise? The Adoption of CSR Tools by Companies Domiciled in Tax Havens.” Journal of Business Ethics 110 1 1 14
Robertson, ChristopherJ and Andrew Watson. 2004. “Corruption and change: The impact of foreigndirectinvestment.” Strategic Management Journal 25 (4): 385–396. 10.1002/smj.382 Robertson
the extent that the foreign tax is less than the domestic tax. The size of the benefit depends on the difference between the foreign and domestic tax rates, the length of the period of deferral, and the prevailing interest rates ( Arnold (1986) ).
The policy objectives behind the introduction of the CFC rules differ among the states that have enacted such legislation. However, fundamentally, the CFC legislation is typically seen as an instrument to guard against the unjustifiable erosion of the domestic tax base by the export of investments to non
of an additional 100% for R&D expenditure. The proposal addresses also the problem of debt receiving a more favourable tax treatment than direct capital investment. This proposal concerns the corporate tax base and it is not meant to harmonise the various national corporate tax rates.
One possible and a very major tax reform change regarding company taxation could at least in principle be a total focus shift from the company (firm) level tax to the owner-investor level tax (Example: the Estonian tax system). This may not be the most realistic way. If the company
in practice is much easier for non-listed than listed companies.
Furthermore, the taxation may vary within one asset class depending on the form of investment or financial instrument used. For example, one may invest in equities by making direct equity investments or then by using funds or different kind of life and pension insurance products. The tax treatment of these different investment instruments is not consistent; the effective tax burden can vary a lot between the different investment forms and cases. Above all, this is due to the fact that by using
dividends, which was passed in 1998. Cf. SEL2(1)(c) (Den.), as amended by the adoption of Law no. 1026 of December 23,1998. The amendment entailed that dividends distributed to foreign parent companies were not subject to limited Danish tax liability, regardless of where the parent company was resident. The amendment was partly caused by administrative difficulties with handling the rules valid at the time and partly caused by a desire to become a more attractive country for foreigninvestment. The latter actually seemed to become true, as foreign groups and investors
Notes : All calculations are based on the actual asset composition in manufacturing. The following inflation rates were used: 7 percent for 1970 and 9.4 percent for 1980. The calculations conform to the general framework developed by King and Fullerton (1984) . The average holding period is assumed to be 10 years. A negative tax rate implies that the rate of return after tax is greater than before tax. For instance, a tax rate of -83 percent for a debt-financed investment owned by a tax-exempt institution in 1980 implies that a real rate of return of 10 percent