Did the Tax Cuts and Jobs Act Reduce Profit Shifting by US Multinational Companies?

Javier Garcia-Bernardo (), Petr Janský and Gabriel Zucman
Additional contact information
Javier Garcia-Bernardo: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic and Department of Methodology & Statistics, Utrecht University, the Netherlands

No 2025/28, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: The 2017 Tax Cut and Jobs Act lowered the US corporate tax rate and introduced provisions to curb profit shifting. We combine survey data, tax data, and firm financial statements to study the evolution of the geographical allocation of US firms´ profits after the reform. Between 2017 and 2020, the share of profits booked abroad declined by 1 - 5 percentage points, in part related to repatriations of intellectual property to the US. However, the share of foreign profits booked in tax havens remained stable at around 50%. While aggregated changes in profit allocation are small, a number of firms responded strongly.

Keywords: multinational corporation; corporate taxation; profit shifting; effective tax rate; country-by-country reporting; Tax Cuts and Jobs Act (search for similar items in EconPapers)
JEL-codes: F23 H25 H26 H32 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2025-12, Revised 2025-12
New Economics Papers: this item is included in nep-acc and nep-pbe
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ies.fsv.cuni.cz/en/did-tax-cuts-and-jobs-a ... tinational-companies (application/pdf)

Related works:
Working Paper: Did the Tax Cuts and Jobs Act Reduce Profit Shifting by US Multinational Companies? (2022)
Working Paper: Did the Tax Cuts and Jobs Act Reduce Profit Shifting by US Multinational Companies? (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2025_28

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().