Tackling BEPS in the Global South: Evidence from Peru’s tax reform

Katia Toledo and Alfredo Alvarado Enciso

Economic Systems, 2023, vol. 47, issue 3

Abstract: This study assesses the effect of a transfer pricing reform on tax payments at the firm level. Given the critical role that the consulting firms play in tax avoidance schemes, we include the effect of expenditure on tax advisory. Exploiting the reform’s particular features, we use a regression discontinuity design to estimate the causal effect of the tax reform. We find that firms affected by the intervention on average paid more taxes in 2017. Although we do not find effects for 2018, we find no conclusive evidence that spending on tax advisory drove such an effect.

Keywords: Regression discontinuity design; Base erosion; Profit shifting; Transfer pricing; Developing countries; Peru (search for similar items in EconPapers)
JEL-codes: F23 H25 H26 H3 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:47:y:2023:i:3:s0939362523000560

DOI: 10.1016/j.ecosys.2023.101122

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