Work

The Effect of Taxes on Investment and Income Shifting to Puerto Rico

Year: 1994

Type: report

Abstract: The income of Puerto Rican affiliates of U.S. corporations is essentially untaxed by either Puerto Rico or the U.S. This lowers the tax penalty on real investment there, and also makes it attractive to shift reported taxable income from the U.S. parent corporation to the Puerto Rican affiliate. Because the ability to shift income is affected by the presence of real operations, the true marginal effective tax rate on investment in Puerto Rico depends on the income shifting opportunities.

Source: National Bureau of Economic Research

DOI: 10.3386/w4869

Authors: Harry Grubert, Joel Slemrod

Institutions: United States Department of the Treasury, University of Michigan

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2890751656

Cites:

Cited by: 30

Related to: 10