Tax Avoidance through Advance Tax Rulings - Evidence from the LuxLeaks Firms

Birgit Huesecken and Michael Overesch

FinanzArchiv: Public Finance Analysis, 2019, vol. 75, issue 4, 380-412

Abstract: Our empirical study tests the effect of special tax deals on tax avoidance by multinational corporations. In 2014, the International Consortium of Investigative Journalists published confidential documents identifying hundreds of firms worldwide that had benefited from advance tax rulings. We find that after engaging in an advance tax ruling in the tax haven Luxembourg, firms have lower worldwide effective tax rates than nonruling firms. The results are robust even if we mitigate a potential bias via propensity-score matching. Consequently, this study gives evidence for corporate tax avoidance through special tax deals in the form of advance tax rulings.

Keywords: advance tax ruling; corporate taxation; tax competition; tax avoidance (search for similar items in EconPapers)
JEL-codes: F23 H26 H32 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/tax-avoidan ... s-101628fa-2019-0011
Fulltext access is included for subscribers to the printed version.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mhr:finarc:urn:doi:10.1628/fa-2019-0011

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

DOI: 10.1628/fa-2019-0011

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().