 On the effects of anti-profit shifting regulations: A developing country perspectiveSabine Laudage Teles, Nadine Riedel and Kristina Strohmaier Journal of Public Economics, 2024, vol. 235, issue C Abstract: Multinational profit shifting is a major concern for low and middle income countries (LMICs). Many have enacted anti-profit shifting rules in order to constrain this type of tax avoidance behavior. Yet, not much is known on the rules’ effects. We offer a first empirical assessment, providing two pieces of evidence: First, we draw on macro data for more than 120 LMICs for a 30-year-period and show that the introduction of transfer pricing (TP) rules – provisions that constrain profit shifting from mis-pricing of intra-firm trade – significantly increased corporate tax revenue collection in LMICs. Second, we use rich tax administrative and trade data for South Africa to provide “first-stage” evidence for firms’ behavioral response to stricter TP provisions: we establish that a tightening of South African TP rules reduced intra-firm trade mis-pricing and increased taxable income reporting of affected multinational firms. Keywords: Corporate taxation; International taxation; Transfer pricing laws (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:235:y:2024:i:c:s0047272724000707 DOI: 10.1016/j.jpubeco.2024.105134 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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