Effect of Anti-Tax Avoidance Laws on the Location of Patent Ownership and Research and Development Activities in Multinational Corporations

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© University of the Witswatersrand, Johannesburg
Multinational corporations (MNCs) are always under scrutiny for engaging in activities that tax authorities allege are solely intended to lower the tax burden of these organiza- tions. Consequently, governments are always formulating new laws, rules, and regula- tions that target tax avoidance activities of MNCs, limiting approaches and legal loop- holes that may be used to lower the corporations’ tax burden. This study investigates how anti-avoidance laws influence the location of patent ownership and research and devel- opment (R&D) activities of MNCs. It is a study that takes a closer look at the murky waters that characterize the international taxation system to see how global players navi- gate taxation measures for their own benefit. The study visits tax destinations like South Africa, Ireland, and the US to highlight the characteristics of tax systems and to throw light on the situation on the ground. Ultimately, growing evidence from resource studies and the news media indicates that MNCs have resorted to shifting profits from high- to low-tax jurisdictions with the aim of lowering their overall corporate tax obligation. It is an explosive study that reflects the interesting web of activities that persist behind the international tax regulations. People have forged careers out of maneuvering tax ju- risdictions to save millions of dollars for MNCs.
A research report submitted to the Faculty of Commerce, Law, and Management in fulfillment of the requirements for the degree of Master of Commerce in the field of Taxation
Research & Development, Patents, Income-Shifting, UCTD, Tax, Tax Law, Base Erosion and Profit Shifting, Multinational Corporations, General Anti-Avoidance Rule