Publicação
How corporate tax impact decisions in merger and acquisition deals. The phenomenon of "profit shifting"
| Resumo: | Using data on mergers and acquisitions, this paper aims at evaluating the impact of corporate tax on the type of M&A deals. The results suggest the existence of a negative relationship between the corporate tax rate charged in the target’s country and the probability of having a merger/acquisition corresponding to 100% of the target company. Suggesting that cross-border deals, where the target’s country is characterized by lower tax rates, may result in profitability gains for the acquiring company. Moreover, benefits and implications of a harmonized corporate tax base are presented as a possibility for hedging against “profit shifting” practices resulting in a reduction of cross-border M&A deals. |
|---|---|
| Autores principais: | Roncalli, Bianca |
| Assunto: | Mergers and acquisitions Corporate tax rate Profit shifting Consolidated corporate tax base. |
| Ano: | 2023 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | Using data on mergers and acquisitions, this paper aims at evaluating the impact of corporate tax on the type of M&A deals. The results suggest the existence of a negative relationship between the corporate tax rate charged in the target’s country and the probability of having a merger/acquisition corresponding to 100% of the target company. Suggesting that cross-border deals, where the target’s country is characterized by lower tax rates, may result in profitability gains for the acquiring company. Moreover, benefits and implications of a harmonized corporate tax base are presented as a possibility for hedging against “profit shifting” practices resulting in a reduction of cross-border M&A deals. |
|---|