Comparing UK Tax Returns of Foreign Multinationals to Matched Domestic Firms

Katarzyna Bilicka

American Economic Review, 2019, vol. 109, issue 8, 2921-53

Abstract: In this paper, I use confidential UK corporate tax returns data to explore whether there are systematic differences in the amount of taxable profits that multinational and domestic companies report. I find that the ratio of taxable profits to total assets reported by foreign multinational subsidiaries is one-half that of comparable domestic standalones. The majority of the difference is attributable to the fact that a higher proportion of foreign multinational subsidiaries report zero taxable profits. I document how the estimated difference is related to profit shifting and show that using accounting data leads to much smaller estimates of the difference.

JEL-codes: F23 H25 H32 L25 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/aer.20180496
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Citations: View citations in EconPapers (83)

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