Does Acquisition By Non-U.S. Shareholders Cause U.S. Firms To Pay Less Tax?
- Topics:
- Mergers
- Tags:
- Acquisition,
- Finance,
- Financial Planning,
- Free Trade,
- Taxes
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Overview: This article tests whether the domicile of an acquirer affects the post-acquisition taxable income of its target. Prior studies have documented that foreign-controlled U.S. companies report less-taxable income than similar companies with American shareholders. However, these studies and others have been unable to definitively link the differences in taxes to more aggressive tax planning by foreign firms. In addition, it employs a research design that better isolates the influence of domicile on taxes. Specifically, it compares the actual corporate tax returns of U.S.-domiciled companies before and after their acquisition by foreign firms with the actual corporate tax returns of similar U.S.-domiciled companies before and after their acquisition by other U.S. firms. Besides this, it also reviews the prior research concerning shareholder domicile and taxes, details the sample selection, and discusses the empirical findings.
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Format: PDF | Size: 55KB | Date: Dec 2001 | Pages: 18
