Quotation Weichenrieder, Alfons and Ruf, Martin. 2012. The Taxation of Passive Foreign Investment: Lessons from German Experience. Canadian Journal of Economics 45 (4): S. 1504-1528.




The paper evaluates the working of German CFC rules that restrict the use of foreign subsidiaries located in low-tax countries to shelter passive investment income from home taxation. While passive investments make up a significant fraction of German outbound FDI, we find that German CFC rules are quite effective in restricting investments in low-tax jurisdictions. We find evidence that the German 2001 tax reform, which unilaterally introduced exemption of passive income in medium- and high-tax countries, has led to some shifting of passive assets into countries for which the exemption was previously limited.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Canadian Journal of Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, VW-C, WH-B
Language English
Title The Taxation of Passive Foreign Investment: Lessons from German Experience
Volume 45
Number 4
Year 2012
Page from 1504
Page to 1528
URL http://onlinelibrary.wiley.com/doi/10.1111/j.1540-5982.2012.01737.x/abstract
DOI 10.1111/j.1540-5982.2012.01737.x
JEL H25 H73


Weichenrieder, Alfons (Details)
Ruf, Martin (Faculty of Economics and Business Administration, Eberhard Karls University, Tübingen, Germany)
Research Institute for International Taxation FI (Details)
Tax Policy and European Tax Law Group AB (Details)
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