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  1. Profit-shifting behaviour of emerging multinationals from India
    Author: Das, Khanindra Ch.
    Published: February 2022
    Publisher:  United Nations University World Institute for Development Economics Research, Helsinki, Finland

    This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial... more

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    This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial Centre (OFC). The impact of the corporate tax rate on profitability is examined using a fixed-effects model for the period 2010-19. In the case of subsidiaries established via OFCs, a negative relationship between corporate tax rate and profitability is found, indicating profit-shifting behaviour. However, a disaggregated investigation by characteristics of parent firms reveals that the negative relationship holds primarily for via-OFC subsidiaries that belong to multinational firms with limited transactions of intangible assets, lower export intensity, and limited dependence on external commercial borrowing. The evidence of profit shifting is not all pervasive. However, in the presence of these transaction channels, multinational firms establish better control over intra-firm resources, which enables the transfer of resources within the multinational firm when the network of subsidiaries is connected through the OFC. The results are robust to the inclusion of economic and institutional factors pertaining to the host country.

     
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    Source: Union catalogues
    Language: English
    Media type: Ebook
    Format: Online
    ISBN: 9789292671525
    Other identifier:
    hdl: 10419/259377
    Series: WIDER working paper ; 2022, 21
    Subjects: corporate tax; multinational firms; offshore financial centre; profit shifting; panel data; tax haven
    Scope: 1 Online-Ressource (circa 24 Seiten), Illustrationen
  2. Hide-and-seek
    can tax treaties reveal offshore wealth?
    Author: Lee, Jeong Dae
    Published: 2019
    Publisher:  United Nations, ESCAP, Bangkok, Thailand

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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: Working paper series / Macroeconomic Policy and Financing for Development Division ; WP/19, 07 (August 2019)
    Subjects: tax evasion; tax haven; exchange of information
    Scope: 1 Online-Ressource (circa 28 Seiten), Illustrationen
  3. Multinational corporations and tax havens
    evidence from country-by-country reporting
    Author: Garcia-Bernardo, Javier; Jansky, Petr; Tørsløv, Thomas
    Published: [2019]
    Publisher:  Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Prague

    A growing body of economics literature shows that multinational corporations (MNCs) shift their profits to tax havens. We contribute to this evidence by comparing a range of available data sets focusing on US MNCs, including country-by-country... more

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    A growing body of economics literature shows that multinational corporations (MNCs) shift their profits to tax havens. We contribute to this evidence by comparing a range of available data sets focusing on US MNCs, including country-by-country reporting data which has been released in December 2018 for the first time. With each of the datasets, we analyse the effective tax rates that US MNCs face in each country and the amount of profits they report. Using country-by-country reporting data, we have been able to establish that lower effective corporate tax rates are associated with higher levels of reported profits when compared with different indicators of real economic activity. This corresponds to the notion that MNCs often shift profits to countries with low effective tax rates - without also shifting substantive economic activity. Consequently, we identify the most important tax havens for US MNCs as countries with both low effective tax rates and high profits misaligned with economic activity.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/228072
    Series: IES working paper ; 2019, 31
    Subjects: Effective tax rate; profit shifting; tax haven; country-by-country reporting; multinational enterprise; foreign direct investment; tax competition
    Scope: 1 Online-Ressource (circa 40 Seiten), Illustrationen
  4. Corporate taxation, tax administration and financial development
    Author: Mardan, Mohammed
    Published: [2019]
    Publisher:  CESifo, Center for Economic Studies & Ifo Institute, Munich, Germany

    This paper analyzes corporate tax-related policies and the difference between them in developed and developing countries. I show that the relationship between financial development and corporate income tax rates as well as the tax administrations'... more

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    This paper analyzes corporate tax-related policies and the difference between them in developed and developing countries. I show that the relationship between financial development and corporate income tax rates as well as the tax administrations' effectiveness follows a U-shaped pattern, a discrepancy to the observation that developing countries usually have the weakest administrative structures. However, this observation can be explained under the premise that the tax administration's effectiveness is determined at a later stage, and not simultaneously with the corporate tax rate. Moreover, I show that, under this premise, fighting tax havens increases tax revenues in developed countries, but decreases them in developing countries. Instead, if policies are simultaneously considered, the fight against tax havens will also benefit developing countries.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/214942
    Series: Array ; no. 7940 (November 2019)
    Subjects: developing countries; profit shifting; tax administration; tax competition; tax haven
    Scope: 1 Online-Ressource (circa 50 Seiten), Illustrationen
  5. Real effects of public country-by-country reporting and the firm structure of European banks
    Author: Eberhartinger, Eva; Speitmann, Raffael; Sureth, Caren
    Published: [2020]
    Publisher:  Arbeitskreis Quantitative Steuerlehre, Berlin

    European regulation mandates public country-by-country reporting for banks and is expected to increase costs of tax haven activities. We hand-collect data from IFRS consolidation scopes for European banks and test whether the availability of... more

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    European regulation mandates public country-by-country reporting for banks and is expected to increase costs of tax haven activities. We hand-collect data from IFRS consolidation scopes for European banks and test whether the availability of additional public information on banks' global activity reduces their tax haven presence. In a difference-in-difference analysis, we find that indeed tax haven presence has declined significantly after the introduction of mandatory public country-by-country reporting for European banks, as compared to the insurance industry, which is not subject to this regulation. In further tests, we show that this negative association is particularly driven by a reduction of subsidiaries in "Dot-Havens" and tax havens with high financial secrecy.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/214906
    Edition: This draft: March 2020
    Series: Arqus discussion paper ; no. 255 (March 2020)
    Subjects: country-by-country reporting; real effects; tax haven; tax disclosure
    Scope: 1 Online-Ressource (circa 42 Seiten), Illustrationen
  6. Real effects of public country-by-country reporting and the firm structure of European banks
    Author: Eberhartinger, Eva; Speitmann, Raffael; Sureth, Caren
    Published: 2020
    Publisher:  Universität Wien, Wien

    European regulation mandates public country-by-country reporting for banks and is expected to increase reputational costs in case of tax haven activities. We test whether the availability of additional public information on the locations of banks'... more

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    European regulation mandates public country-by-country reporting for banks and is expected to increase reputational costs in case of tax haven activities. We test whether the availability of additional public information on the locations of banks' subsidiaries reduces their tax haven presence. In a preliminary difference-in-difference analysis we find that indeed, tax haven presence in “Dot-Havens” has declined significantly after the introduction of mandatory public country-by-country reporting for European banks, as compared to the insurance industry which is not subject to this regulation

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
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    Edition: This draft: March 2020
    Series: WU international taxation research paper series ; no. 2020, 01
    Subjects: country-by-country reporting; real effects; tax haven; tax disclosure
    Scope: 1 Online-Ressource (circa 41 Seiten), Illustrationen
  7. Multinational corporations' effective tax rates
    evidence from orbis
    Author: Janský, Petr; Garcia-Bernardo, Javier; Torslov, Thomas
    Published: [2020]
    Publisher:  Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Prague

    Effective tax rates (ETRs) estimated from the balance sheet data of multinational corporations (MNCs) are useful for comparing MNCs' corporate income taxation across countries. In this paper we propose a new methodological approach to estimate ETRs... more

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    Effective tax rates (ETRs) estimated from the balance sheet data of multinational corporations (MNCs) are useful for comparing MNCs' corporate income taxation across countries. In this paper we propose a new methodological approach to estimate ETRs as reliably and as for as many countries as possible using Orbis' unconsolidated data for the 2011-2015 period. We focus on countries with at least 50 available companies, which results in a sample of 50, mostly European, countries. We estimate the ETR of a country as the ratio of corporate income tax to gross income for all affiliates of MNCs in that country, weighted by gross income. We propose four ETR estimations, including lower and upper bounds, which differ by gross income calculation. We find that ETRs substantially differ from statutory rates for some countries. For example, we show that despite similar statutory rates of 28% and 29%, MNCs in Luxembourg paid as little as 1-8% of gross income in taxes while those in Norway paid as much as 45-66%. Despite being the best available, existing data is still imperfect, and we therefore call for better data in the form of MNCs' unconsolidated, public country-by-country reporting data.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/228102
    Series: IES working paper ; 2020, 20
    Subjects: Effective tax rate; multinational corporation; foreign direct investment; profit shifting; tax haven; tax competition
    Scope: 1 Online-Ressource (circa 41 Seiten), Illustrationen
  8. How much multinational corporations pay in taxes and where
    evidence from their country-by-country reports
    Author: Faccio, Tommaso; Godar, Sarah; Janský, Petr; Seabarron, Oliver
    Published: [2021]
    Publisher:  Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Prague

    By exploiting country-by-country reports (CBCRs) prepared according to the OECD BEPS Action 13's minimum standards and voluntarily published by multinational corporations (MNCs), we show that the CBCR data can be used to identify how much MNCs pay in... more

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    By exploiting country-by-country reports (CBCRs) prepared according to the OECD BEPS Action 13's minimum standards and voluntarily published by multinational corporations (MNCs), we show that the CBCR data can be used to identify how much MNCs pay in taxes and where, as well as how important tax havens and profit shifting are. The largest, hand-collected sample of these CBCRs combines global information from ten MNCs, which are special not only in terms of tax transparency, by being the only MNCs to publish their CBCR, but also in terms of industry composition, with a half of them in the extractive industries, and - perhaps, therefore - the observed tax characteristics. Specifically, we observe that the worldwide effective tax rates of our sample MNCs are higher on average than our comparison estimates based on the aggregate data for large MNCs published in 2020. We also find that the sample MNCs report slightly more profits in tax havens on average than many large MNCs, although most of the sample MNCs are far below that average. We further find some indication of profit shifting as the sample MNCs' profits in tax havens are much higher than their economic activity suggests and we estimate a non-linear relationship between profits and effective tax rates, which is negative up to effective tax rates of around 30%. We highlight the differences across countries and MNCs by presenting country-level results, both for the whole sample and for specific MNCs, but CBCR data for even more individual MNCs would be needed to test for any systematic, MNC-specific determinants behind these differences.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/247389
    Series: IES working paper ; 2021, 22
    Subjects: multinational corporation; country-by-country reporting; effective tax rate; profit shifting; tax haven
    Scope: 1 Online-Ressource (circa 40 Seiten), Illustrationen
  9. IPOs and corporate taxes
    Author: Dobridge, Christine; Lester, Rebecca; Whitten, Andrew
    Published: July 2021
    Publisher:  Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, D.C.

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    Source: Union catalogues
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    Series: Finance and economics discussion series ; 2021, 058
    Subjects: Corporate tax; IPO; investment; tax haven
    Scope: 1 Online-Ressource (circa 75 Seiten), Illustrationen
  10. Pennies from haven
    wages and profit shifting
    Author: Alstadsæter, Annette; Bjørkheim, Julie Brun; Davies, Ronald B.; Scheuerer, Johannes
    Published: February 2022
    Publisher:  CESifo, Center for Economic Studies & Ifo Institute, Munich, Germany

    Increasing attention has been given to the fact that some multinational enterprises shift income to tax haven countries, an activity that generates inequality in corporate taxation. Here, we examine how profit shifting relates to wage inequality.... more

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    Increasing attention has been given to the fact that some multinational enterprises shift income to tax haven countries, an activity that generates inequality in corporate taxation. Here, we examine how profit shifting relates to wage inequality. Using rich matched employer-employee data from Norway, we find that profit-shifting firms pay higher wages, particularly among service firms where the wage premium is approximately 2%. Furthermore, this average effect masks significant within-firm heterogeneity with high-skill occupations – and managers in particular – earning higher shifting wage premiums. CEOs particularly gain, with their wages rising nearly 10%. These results thus suggest that profit shifting by multinationals meaningfully contributes to wage inequality, both between and within firms. Finally, our back-of-the-envelope calculations suggest these higher wages would generate additional income tax revenues which would offset around 3% of the fall in Norway’s corporate tax revenues due to profit shifting.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/252107
    Series: CESifo working paper ; no. 9590 (2022)
    Subjects: profit shifting; tax haven; tax avoidance; multinational firms; wage distribution; inequality
    Scope: 1 Online-Ressource (circa 44 Seiten), Illustrationen
  11. FDI-led growth models
    Sraffian supermultiplier models of export platforms and tax havens
    Author: Woodgate, Ryan
    Published: December 2022
    Publisher:  Berlin School of Economics and Law, Institute for International Political Economy Berlin, Berlin

    This paper develops two Sraffian supermultiplier models of two different kinds of economies that are dependent upon foreign direct investment (FDI): the "export platform FDI-led" growth model and the "tax haven FDI-led" growth model. The former is... more

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    This paper develops two Sraffian supermultiplier models of two different kinds of economies that are dependent upon foreign direct investment (FDI): the "export platform FDI-led" growth model and the "tax haven FDI-led" growth model. The former is driven by the growth of the exports of foreign-owned firms and is associated with greenfield FDI inflows, whereas the latter is driven by the growth of profits booked at foreign-owned shell companies that are partly absorbed through taxation and is associated with intangible FDI inflows. The two models achieve demand, output, and income growth via fundamentally different channels yet appear similarly export-led given how profit shifting artificially inflates the net exports of tax havens. Based on these models, a set of empirical indicators are proposed to differentiate exportplatform from tax haven economies. In contrast to Bohle/Regan (2021), who characterise output growth in both Hungary and Ireland as being led by the exports of foreign-owned firms, the model and indicators proposed here support the hypothesis that Ireland is closer to the tax haven FDI-led growth model.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
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    hdl: 10419/266642
    Series: Working paper / Institute for International Political Economy Berlin ; no. 198 (2022)
    Subjects: Foreign direct investment; growth model; multinational corporation; tax haven
    Scope: 1 Online-Ressource (circa 24 Seiten), Illustrationen
  12. Tax effects on FDI - just a rerouting
    Author: Erokhin, Dmitry
    Published: [2023]
    Publisher:  WU Vienna University of Economics and Business, [Vienna]

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    Series: WU international taxation research paper series ; no. 2023, 02
    Subjects: indirect FDI; bilateral effective average tax rate; anti-tax avoidance rule; tax haven
    Scope: 1 Online-Ressource (circa 46 Seiten), Illustrationen
  13. Tax haven welfare and the crackdown on secrecy
    evidence from night light emissions
    Author: Hoang Ha Nguyen Thi; Weichenrieder, Alfons J.
    Published: October 2023
    Publisher:  CESifo, Munich, Germany

    Following numerous high-profile international initiatives, tax haven jurisdictions have been nudged into agreeing on tax information exchange. We analyse whether these agreements had measurable effects on the economy of cooperative tax havens. As GDP... more

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    Following numerous high-profile international initiatives, tax haven jurisdictions have been nudged into agreeing on tax information exchange. We analyse whether these agreements had measurable effects on the economy of cooperative tax havens. As GDP data are missing for many small tax haven jurisdictions, we use night light data as a proxy for economic activity. Depending on the exact list of tax havens, using this proxy allows us to increase the number of tax haven jurisdictions by up to 25 percent compared to using GDP. We find that tax havens which have signed more tax information exchange agreements experienced a significantly higher economic activity, as proxied by the sum of night light emissions. This applies to agreements that provide information exchange on request as well as agreements that implement automatic information exchange. When we use GDP as a measure of economic activity, tax information exchange agreements are not associated with a differential development of economic activity. Both observations suggest that information exchange treaties so far have not reduced economic growth in more cooperative tax havens.

     
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    Source: Union catalogues
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    Format: Online
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    hdl: 10419/282409
    Series: CESifo working papers ; 10721 (2023)
    Subjects: tax haven; night light emissions; tax information exchange; economic development
    Scope: 1 Online-Ressource (circa 34 Seiten), Illustrationen
  14. Hidden havens
    state and local governments as tax havens?
    Author: Agrawal, David R.
    Published: July 2023
    Publisher:  CESifo, Munich, Germany

    An international tax haven is usually a low-tax jurisdiction that seeks to attract investment by foreign investors. But, there are many state and local jurisdictions within federal systems that set zero tax rates on personal or corporate income,... more

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    An international tax haven is usually a low-tax jurisdiction that seeks to attract investment by foreign investors. But, there are many state and local jurisdictions within federal systems that set zero tax rates on personal or corporate income, consumption, property, and wealth in an effort to attract activity from other high-tax jurisdictions. I discuss whether subnational tax havens are distinct from intense tax competition. I conclude that in a federal system, the economic implications of the two may be similar, but the policy responses differ subtly. A survey of the empirical evidence on the effect of zero or very low tax rates indicates that the lowest tax jurisdiction may disproportionately benefit from non-real base shifting, but real and avoidance responses also arise in response to smaller tax differentials between non-havens. Turning to the corporate income tax, I discuss how legal rules such as formula apportionment, economic nexus, and incorporation rules influence tax competition and the avoidance behaviors of multistate companies.

     
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    hdl: 10419/279324
    Series: CESifo working papers ; 10573 (2023)
    Subjects: tax haven; tax competition; state and local public finance; regulatory competition; corporate charters
    Scope: 1 Online-Ressource (circa 37 Seiten)
  15. Are tax havens good? Implications of the crackdown on secrecy
    Author: Weichenrieder, Alfons J.; Xu, Fangying
    Published: 2015
    Publisher:  Univ.-Bibliothek Frankfurt am Main, Frankfurt am Main

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  16. Knocking on tax haven's door
    multinational firms and transfer pricing
    Published: 2014
    Publisher:  CESifo, München

    This paper analyzes the transfer pricing of multinational firms. We propose a simple framework in which intra-firm prices may systematically deviate from arm's length prices for two motives: i) pricing to market, and ii) tax avoidance. Multinational... more

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    This paper analyzes the transfer pricing of multinational firms. We propose a simple framework in which intra-firm prices may systematically deviate from arm's length prices for two motives: i) pricing to market, and ii) tax avoidance. Multinational firms may decide not to avoid taxes if the risk to be sanctioned is high compared to the tax gap. Using detailed French firm-level data on arm's length and intra-firm export prices, we find that both mechanisms are at work. The sensitivity of intra-firm prices to foreign taxes is reinforced once we control for pricing-to-market determinants. Most importantly, we find almost no evidence of tax avoidance if we disregard exports to tax havens. Back-of-the-envelope calculations suggest that tax avoidance through transfer pricing amounts to about 1% of the total corporate taxes collected by tax authorities in France. The lion's share of this loss is driven by the exports of 450 firms to ten tax havens. As such, it may be possible to achieve significant revenue increases with minimal cost by targeting enforcement.

     
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    Content information
    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/107293
    Series: Array ; 5132
    Subjects: Verrechnungspreis; Multinationales Unternehmen; Steuerflucht; Preismanagement; Frankreich; transfer pricing; tax haven; pricing to market
    Scope: Online-Ressource ([1], 28 S.), graph. Darst.