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Multinationals, Intra-Firm Trade and the Taxation of Foreign-Source Income

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  • Guttorm Schjelderup

Abstract

Most countries use the tax credit scheme instead of the tax deduction scheme to alleviate double taxation of foreign earnings. Under the tax deduction scheme, double taxation is alleviated by treating foreign taxes paid as business cost deductible against domestic income rather than allowing them to be credited against the taxes levied by the home country (as is the case under the tax credit system).This paper examines how the two tax systems affect trade between affiliates of a multinational firm.

Suggested Citation

  • Guttorm Schjelderup, 1999. "Multinationals, Intra-Firm Trade and the Taxation of Foreign-Source Income," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 93-105.
    • Handle: RePEc:taf:ijecbs:v:6:y:1999:i:1:p:93-105
    DOI: 10.1080/13571519984340
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    References listed on IDEAS

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    1. Guttorm Schjelderup & Alfons J. Weichenrieder, 1999. "Trade, Multinationals, and Transfer Pricing Regulations," Canadian Journal of Economics, Canadian Economics Association, vol. 32(3), pages 817-844, May.
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    Cited by:

    1. Rathke, Alex A. T., 2015. "Transfer pricing manipulation, tax penalty cost and the impact of foreign profit taxation," EconStor Conference Papers 129075, ZBW - Leibniz Information Centre for Economics.
    2. Alex Augusto Timm Rathke, 2015. "Transfer pricing manipulation, tax penalty cost and the impact of foreign profit taxation," Papers 1508.03853, arXiv.org.
    3. Rathke, Alex, 2015. "Transfer pricing manipulation, tax penalty cost and the impact of foreign profit taxation," MPRA Paper 66133, University Library of Munich, Germany.

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