The effect of global anti-tax avoidance efforts on sub-national profit shifting

Johannes Gaul and Inga Schulz

No 26-009, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper examines whether multinational enterprises (MNEs) adapt to international anti-tax avoidance regulation by intensifying domestic profit shifting activities. We compile a novel dataset by mapping MNE ownership network structures that link international to sub-national tax haven subsidiaries over time. Our analyses show that tighter international rules lead more strongly affected firms to intensify their presence in sub-national tax havens, consistent with strong increases in profit tax revenues at these locations. This shift indicates that international tax policies have had bite in constraining cross-border tax avoidance. At the same time, our findings reveal MNEs' strategic flexibility and highlight domestic spillovers and local consequences of global tax reforms.

Keywords: Corporate Networks; Geospatial Data; ATAD; CbCR (search for similar items in EconPapers)
JEL-codes: H26 H71 K10 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-acc, nep-iaf, nep-net, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:340013

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