Detail práce

Withholding Tax Rate Elasticities of Foreign Direct Investment Outflows and Tax Revenue Consequences of Double Tax Treaties

Autor: Mgr. Jan Láznička
Rok: 2019 - zimní
Vedoucí: doc. Petr Janský Ph.D.
Typ práce: Diplomová
Finance, finanční trhy a bankovnictví
Jazyk: Anglicky
Stránky: 83
Abstrakt: This thesis provides a cross-country analysis of potential tax revenue losses due
to the ways different countries tax over-border dividend and interest incomes
of multinational enterprise. Withholding taxation of outgoing dividends and
interest payments is regulated by domestic tax rules as well as bilateral double
tax treaties. The signing of such a treaty might substantially reduce the tax rate
levied by the source country on the outgoing passive income and thus decrease
its tax revenue. We create a large panel dataset and estimate withholding tax
rate elasticities of dividend and interest outflows for a large set of countries
around the world. Subsequently, we use these elasticities to estimate potential
tax revenue losses due to outgoing dividend and interest payments for the source
countries in our dataset. The results show highly elastic dividend outflows,
2.3% - 2.58% decrease related to 1% increase in the applicable withholding
tax. We also find substantial tax revenue losses due to dividend outflows for
a number of source countries, the largest for Canada (1.35 - 3.19 billion USD)
and the United States (2.27 - 2.94 billion USD). The investor country behind
the largest part of potential losses shows up to be the Netherlands.


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