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
Display Date
File
File
Download Report
(723.93 KB)

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 Areas Taxes and budgets
Tags Federal budget and economy
Policy Centers Urban-Brookings Tax Policy Center