Regulatory avoidance responses to private Country-by-Country Reporting

Felix Hugger ()
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Felix Hugger: LMU Munich

International Tax and Public Finance, 2025, vol. 32, issue 1, No 8, 309 pages

Abstract: Abstract This paper investigates regulatory avoidance in the context of private country-by-country reporting (CbCR) introduced as part of the OECD/G20 BEPS initiative. The reporting framework requires multinational companies above a revenue threshold to provide tax authorities with new and detailed information on their global activities, but the data are not made publicly available. I find robust evidence for an increase in mass below the revenue threshold after the introduction of CbCR in line with an avoidance response. Company types for which CbCR would imply relatively high costs including private companies or more tax-aggressive firms show a stronger avoidance response. The heterogeneities found can at least partially be explained by an analysis of increases in tax costs. The finding of regulatory avoidance of multinational enterprises in response to a fixed revenue threshold is of additional relevance in light of the international tax reform agenda which relies on similar thresholds.

Keywords: Regulatory avoidance; Country-by-country reporting; Tax transparency; Tax avoidance (search for similar items in EconPapers)
JEL-codes: F23 H25 H26 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10797-024-09827-y

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