Effects of corporate transparency on tax avoidance: evidence from country-by-country reporting

Tijmen Tuinsma (), Kristof Witte, Petr Janský, Miroslav Palanský and Vitezslav Titl
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Tijmen Tuinsma: Katholieke Universiteit Leuven
Kristof Witte: Katholieke Universiteit Leuven
Petr Janský: Charles University
Miroslav Palanský: Charles University
Vitezslav Titl: Katholieke Universiteit Leuven

International Tax and Public Finance, 2025, vol. 32, issue 5, No 3, 1366-1398

Abstract: Abstract Since 2016, multinationals with a revenue over € 750 million have to submit country-by-country reports to tax authorities to deter tax avoidance. Using a regression discontinuity design, we provide evidence for an increase in affected multinationals’ effective tax rates. However, the most aggressive multinationals with known tax haven presence were only moderately affected. The effect is mainly driven by medium-aggressive firms, which achieved low effective tax rates without tax haven affiliates to shift profits to. The policy was thus effective in combating some tax avoidance but profit shifting to tax havens remains an issue, explaining the push for further policy measures including the global minimum corporate tax rate.

Keywords: Country-by-country reporting; Corporate tax avoidance; Tax havens; Financial transparency (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/s10797-025-09885-w

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