Profit Shifting of Multinational Corporations Worldwide

Javier Garcia-Bernardo and Petr Janský
Additional contact information
Javier Garcia-Bernardo: Tax Justice Network, CORPTAX, Charles University in Prague

No 2021/14, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: We exploit the new multinational corporations´ country-by-country reporting data with unparalleled country coverage to study profit shifting to tax havens. We show that a logarithmic function is preferable to linear and quadratic ones for modelling the extremely non-linear relationship between profits and tax rates. Using this methodology, we reveal that multinational corporations shifted US$1 trillion of profits in 2016 and that those headquartered in the United States and China did so most aggressively. We establish that the Cayman Islands is the largest tax haven, whereas countries with lower incomes tend to lose more tax revenue relative to total tax revenues.

Keywords: multinational corporation; corporate taxation; profit shifting; effective tax rate; country-by-country reporting; global development (search for similar items in EconPapers)
JEL-codes: F23 H25 H26 H32 (search for similar items in EconPapers)
Pages: 80 pages
Date: 2021-05
New Economics Papers: this item is included in nep-acc, nep-int, nep-pbe and nep-pub
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6432 (application/pdf)

Related works:
Journal Article: Profit shifting of multinational corporations worldwide (2024)
Working Paper: Profit Shifting of Multinational Corporations Worldwide (2023)
Working Paper: Profit Shifting of Multinational Corporations Worldwide (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2021_14

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