2006–2010

Cross-Border Acquisitions and Taxes: Efficiency and Tax Revenues

Reprint No. 2009:40

Author(s): Pehr-Johan Norbäck, Lars Persson and Jonas VlachosYear: 2009 Title: Canadian Journal of Economics Volume (No.): 42 (4) Pages: 1473–1500
Online article (restrictions may apply)


We develop a theoretical oligopoly model to study how international differences in profit and capital gains taxes affect foreign acquisitions. Reductions in foreign profit taxes tend to trigger inefficient foreign acquisitions, while reductions in foreign capital gains taxes may trigger efficient foreign acquisitions. Foreign acquisitions can increase domestic tax revenues even when profit taxes are evaded. The reason is that bidding competition between foreign firms ensures that all benefits from the acquisition, including tax advantages, are captured by a domestic seller paying capital gains taxes. Tax code issues, such as the treatment of goodwill, are shown to affect the pattern of foreign acquisitions.


Reference:
Norbäck, Pehr-Johan, Lars Persson and Jonas Vlachos (2009), "Cross-Border Acquisitions and Taxes: Efficiency and Tax Revenues". Canadian Journal of Economics 42(4), 1473–1500.

Pehr-Johan Norbäck

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Lars Persson

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lars.persson@ifn.se

Jonas Vlachos

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jonas.vlachos@ne.su.se

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

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Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

About the book

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