The research project aims at finding empirical evidence for taxation effects on multinational companies. By contrast to the existing empirical work dealing with tax effects on multinationals, this project considers the ability of groups to adjust their structure for tax planning purposes. This key aspect takes account of the fact that groups can strongly influence the tax burden on their subsidiaries with the help of cross border holding structures. Therefore, the individual tax bases of the subsidiaries can be influenced even without relocating production. The research program aims at analyzing the tax impact on both the structure of multinationals and the subsidiaries’ investment and financing decisions. The empirical work is based on the MiDi-database (Microdatabase Direct Investment), which is provided by the German Federal Bank for research purposes. The database is a full sample of major cross border investments of groups headquartered in Germany because German companies which conduct cross border investment are legally obliged to report their investments. This characteristic can be seen as a key advantage of the data source. Moreover, changes in the group structures can be traced on an annual basis.
01.01.2011 - 31.12.2012