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Research report

Lessons the United States Can Learn From Other Countries' Territorial Systems for Taxing Income of Multinational Corporations

Rosanne Altshuler, Stephen Shay, Eric Toder
January 21, 2015
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Abstract

The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends. We find that the reasons for maintaining or introducing dividend exemption systems varied greatly among them and do not necessarily apply to the United States. Moreover, classification of tax systems as worldwide or territorial does not adequately capture differences in how countries tax foreign-source income.

Research Area

Federal Budget and Economy Federal spending
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Meet the Experts

  • Rosanne Altshuler
    Professor of Economics, Rutgers University
  • Stephen Shay
  • Eric Toder
    Institute Fellow and Codirector, Tax Policy Center
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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