Ownership of intellectual property and corporate taxation

By Rachel Griffith, H. Miller, M. O'Connell. 2014

282 citations recorded by the source corpus.

Intellectual property accounts for a growing share of firms' assets. It is more mobile than other forms of capital, and could be used by firms to shift income offshore and to reduce their corporate income tax liability. We consider how influential corporate income taxes are in determining where firms choose to legally own intellectual property. We estimate a mixed (or random coefficients) logit model that incorporates important observed and unobserved heterogeneity in firms' location choices. We obtain estimates of the full set of location specific tax elasticities and conduct ex ante analysis of how the location of ownership of intellectual property will respond to changes in tax policy. We find that recent reforms that give preferential tax treatment to income arising from patents are likely to have significant effects on the location of ownership of new intellectual property, and could lead to substantial reductions in tax revenue.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/3188165d79ea98ebcfb8bc642f5d24f4beec0519

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

Citations in the corpus

What is Real and What is Not in the Global FDI Network? (2019, unknown): “We proceed similarly to decompose the inward FDI positions of other economies.(19) When no information on GDP is available, we are unable to calculate the ratio of Total FDI to GDP and therefore cannot predict the ratio of Real to Total FDI.”
Intellectual property box regimes: effective tax rates and tax policy considerations (2013, background): “In a simulation exercise, Griffith et al. (2014) find that IP Boxes work to attract patents, and that those with a high expected value are particularly responsive to tax.”
Patent Boxes Design, Patents Location and Local R&D (2015, methodology): “As Griffith et al. (2014) point out, there is little reason to consider that patents payoffs are uncorrelated across countries, such that ( ) 0 , , , ≠ t k t j Cov π π .”
INTERNATIONAL CORPORATE TAX AVOIDANCE: A REVIEW OF THE CHANNELS, MAGNITUDES, AND BLIND SPOTS (2018, unknown): “…countries (for instance, due to differences in market size or enforcement)8, with the amount of patents held most sensitive to tax in Luxembourg (with an estimated tax semi-elasticity of 3.9) and least sensitive in Germany (with an estimated tax semi-elasticity of 0.5) (Griffith et al, 2014).”
Taxation and Innovation in the 20th Century (2018, unknown): “Some research has been undertaken on the recent issue of patent boxes and the shifting of intellectual property to lower corporate tax havens (Griffith et al., 2014; Alstadsæter et al., 2018).”