Altshuler, Rosanne; Fulghieri, Paolo
June 1994
National Tax Journal;Jun94, Vol. 47 Issue 2, p349
Academic Journal
The United States tax code allows multinational corporations to credit tax payments made to foreign treasuries against domestic tax obligations, up to their United States tax liability on foreign-source income. If foreign tax payments exceed the United States tax liability on foreign-source income, the corporation is said to be in excess credits. We study how the incentives for investment abroad through foreign subsidiaries change as parent corporations transit into and out of excess credits. We also examine how the presence of foreign tax credit carry-forwards affects tax-related investment incentives.


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