International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots

Sebastian Beer, Ruud de Mooij and Li Liu

No 2018/168, IMF Working Papers from International Monetary Fund

Abstract: This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral and corporate inversions. Moreover, it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1 percent—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.

Keywords: WP; tax rate; passive income; dependent variable; Corporate taxation; Multinationals; Profit shifting; International tax avoidance; Meta analysis; host-country tax; company debt; residence country; firm FE; consensus estimate; debt shifting; profit reallocation; elasticity estimate; company transaction; single tax; Corporate income tax; Tax avoidance; Corporate taxes; Personal income; Global (search for similar items in EconPapers)
Pages: 45
Date: 2018-07-23
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Citations: View citations in EconPapers (26)

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Related works:
Journal Article: INTERNATIONAL CORPORATE TAX AVOIDANCE: A REVIEW OF THE CHANNELS, MAGNITUDES, AND BLIND SPOTS (2020)
Working Paper: International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots (2018)
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