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This analysis aims to explore how changes in U.S. tax policy could affect the corporate structures of multinational enterprises.

Repeal of the Deferral Privilege for Earnings from Direct Foreign Investments: An Analysis.

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This analysis aims to explore how changes in U.S. tax policy could affect the corporate structures of multinational enterprises.
Examine potential restructuring strategies for MNEs
Evaluate the implications of repealing the deferral privilege
Analyze the impact on subsidiary dividends and shareholder returns
Decontrol of subsidiaries may raise net dividends to shareholders by 20-25%
Decontrolling is more common among subsidiaries in low tax jurisdictions
Dividends for decontrolled subsidiaries could be nearly six times larger compared to retained CFC status

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Analysis shows U.S.-based MNEs may restructure to avoid tax burden from foreign investments, indicating significant financial adjustments.

Nordhauser et al. (1981) studied this question.

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Analysis shows U.S.-based MNEs may restructure to avoid tax burden from foreign investments, indicating significant financial adjustments.