Work detail

International taxation and cross-border mergers and acquisition

Author: Mgr. Josef Pokorný,
Year: 2019 - summer
Leaders: doc. Petr Janský Ph.D.
Consultants:
Work type: Economic Theory
Masters
Language: English
Pages: 101
Awards and prizes:
Link:
Abstract: This thesis studies the effects of differences in the international tax system
on the location of target companies and potential tax savings leading from
international transactions. Using a large sample of M&A transaction data, we
develop a target location choice model and estimate it by a multinomial logistic
regression. The results show that differences in taxation of target and acquirer
country provide opportunities for tax optimization practices that increase the
probability of choosing a target location with higher tax difference. We further
evaluate these effect using regression on takeover premium which shows that 1
percentage point increase in difference of effective average tax rate may cause
up to 0.5 percentage point increase in takeover premium. The found effects
are heterogenous for individual companies and correspond to characteristics of
tax-inversions and profit shifting practices.

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