Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment

Petr Janský and Miroslav Palansky

No wp-2018-21, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Governments' revenues are lower when multinational enterprises avoid paying corporate income tax by shifting their profits to tax havens. In this paper, we ask which countries' tax revenues are affected most by this tax avoidance and how much. To estimate the scale of profit shifting, we start by observing that the higher the share of foreign direct investment from tax havens, the lower the reported rate of return on this investment.

Keywords: Foreign Direct Investment; Corporate income tax; Tax avoidance; Base erosion; Profit shifting; Inequality (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment (2019)
Working Paper: Estimating the Scale of Profit Shifting and Tax Revenue Losses Related to Foreign Direct Investment (2017)
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