The International Income Taxation of Portfolio Debt in the Presence of Bi-Directional Capital Flows
47 Pages Posted: 16 Jul 2004
There are 2 versions of this paper
The International Income Taxation of Portfolio Debt in the Presence of Bi-Directional Capital Flows
The International Income Taxation of Portfolio Debt in the Presence of Bi-Directional Capital Flows
Abstract
A country's net flow of capital consists of simultaneously occurring imports and exports. Because a tax on the income from capital imports affects the quantity of capital exports and vice versa, tax policies toward inbound and outbound capital should be jointly formulated in order to avoid distortion of these bi-directional flows. For a small open economy, welfare-efficient local capital markets are shown to require, in the limited case of portfolio debt flows: (1) the taxation of income from capital imports by the importing country at the same rate as income of residents from locally invested capital; and (2) the exemption from tax in the home country of income of its residents from capital exports.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Fiscal Paradise: Foreign Tax Havens and American Business
By James R. Hines Jr. and Eric M. Rice
-
Altered States: Taxes and the Location of Foreign Direct Investment in America
-
Tax Policy and Foreign Direct Investment in the United States
-
Coming Home to America: Dividend Repatriations by U.S. Multinationals
-
Taxation and Foreign Direct Investment: A Synthesis of Empirical Research
By Ruud A. De Mooij and Sjef Ederveen
-
Income Shifting in U.S. Multinational Corporations
By David Harris, Randall Morck, ...