U.S. interest-allocation rules: Effects and policy

Rosanne Altshuler, Jack M. Mintz

Research output: Contribution to journalArticlepeer-review

24 Scopus citations


In 1986, the U.S. government undertook a significant reform of its income tax system. One important change for U.S. multinational corporations is related to the allocation of interest expense. This work analyzes the impact of the new U.S. interest allocation rules on the investment and financial decisions of U.S. multinationals. We test the effect of these rules on financing behavior using data from a survey of multinationals assembled by Price Waterhouse for this project. We also calculate effective tax rates for investments at home and abroad, taking the interest allocation rules into account.

Original languageEnglish (US)
Pages (from-to)7-35
Number of pages29
JournalInternational Tax and Public Finance
Issue number1
StatePublished - Feb 1995

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


  • interest allocation rules
  • multinational corporations


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