Download or read book Where Does Multinational Investment Go with Territorial Taxation? Evidence from the UK written by Ms.Li Liu and published by International Monetary Fund. This book was released on 2018-01-12 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2009, the United Kingdom changed from a worldwide to a territorial tax system, abolishing dividend taxes on foreign repatriation from many low-tax countries. This paper assesses the causal effect of territorial taxation on real investments, using a unique dataset for multinational affiliates in 27 European countries and employing the difference-in-difference approach. It finds that the territorial reform has increased the investment rate of UK multinationals by 15.7 percentage points in low-tax countries. In the absence of any significant investment reduction elsewhere, the findings represent a likely increase in total outbound investment by UK multinationals.