Real Responses of Intra-Firm Trade to the Large Corporate Tax Cut under the TCJA: Evidence from Japanese Customs Data

Makoto Hasegawa and Takafumi Suzuki

Discussion papers from Graduate School of Economics , Kyoto University

Abstract: Using Japanese customs data on export transactions from 2014 to 2021, we examine how intra-firm exports to the U.S. responded to the large corporate tax cut enacted under the Tax Cuts and Jobs Act of 2017 (TCJA). We observe exports at the firm-product-consignee-year level and identify whether the consignee is a U.S. subsidiary of the exporter. We find that related-party export prices did not decline relative to unrelated-party export prices following the TCJA, providing no evidence of a profit- shifting response through transfer pricing. In contrast, export quantities and values in related-party transactions increased in the post-TCJA period relative to those in unrelated-party transactions, with particularly strong responses for intermediate goods. These findings suggest that the response of intra-firm exports to the TCJA reflected real adjustment rather than profit-shifting incentives.

Keywords: Intra- rm trade; Transfer pricing; Pro t shifting; Multinational rms; In- ternational taxation (search for similar items in EconPapers)
JEL-codes: F23 H25 H26 (search for similar items in EconPapers)
Pages: 30
Date: 2026-08
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Persistent link: https://EconPapers.repec.org/RePEc:kue:epaper:e-26-001

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