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Tax-Haven Incorporation for U.S.-Headquartered Firms: No Exodus Yet

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  • Eric J. Allen
  • Susan C. Morse

Abstract

U.S. income tax rules may encourage a U.S.-headquartered multinational corporation (MNC) to adopt a structure with a tax haven parent. We study data from firms that conducted initial public offerings in the United States between 1997 and 2010 and offer evidence that U.S.-headquartered MNCs rarely incorporate in tax havens. Of the 918 U.S.-headquartered MNCs that we identify, only 27 are incorporated in tax havens. Others have pointed to the recent increase in the proportion of firms conducting U.S. IPOs that incorporate in tax havens as possible evidence that more U.S.-headquartered MNCs make this decision. We show instead that Chineseheadquartered firms drive this increase.

Suggested Citation

  • Eric J. Allen & Susan C. Morse, 2013. "Tax-Haven Incorporation for U.S.-Headquartered Firms: No Exodus Yet," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(2), pages 395-420, June.
    • Handle: RePEc:ntj:journl:v:66:y:2013:i:2:p:395-420
    DOI: 10.17310/ntj.2013.2.05
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    References listed on IDEAS

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    Cited by:

    1. Harry Grubert & Rosanne Altshuler, 2013. "Fixing the System: An Analysis of Alternative Proposals for the Reform of International Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(3), pages 671-712, September.
    2. Christina M. Lewellen, 2023. "Tax haven incorporation and financial reporting transparency," Review of Accounting Studies, Springer, vol. 28(3), pages 1811-1855, September.
    3. Kimberly A. Clausing, . "Does tax drive the headquarters locations of the world’s biggest companies?," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.

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