Return on investment weighs heavily on most business decisions.  If I invest $X, by the end of the year I&#x27;ll get $X*(1+return%).<p>Since companies can&#x27;t invest everywhere at the same time, they prioritize investments.  A higher tax rate might mean investing in that country later, as there are other investments than have a higher immediate return.<p>I could see a situation where an investment was profitable, but so marginally profitable due to the tax rate that the investment was delayed effectively forever.