Substitution Across Methods of Profit Shifting

Molly J. Saunders-Scott

National Tax Journal, 2015, vol. 68, issue 4, 1099-1120

Abstract: Multinational corporations have a variety of profit-shifting methods available. This paper considers the relationship between methods of shifting. Empirical results using panel data on multinational firms indicate that the implementation of an earnings stripping rule is associated with a reduction in earnings before interest and taxes of 3.8 percent. The negative relationship suggests that corporations treat profit shifting through transfer-pricing manipulation and profit shifting through intercompany debt as substitutes.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:68:y:2015:i:4:p:1099-1120

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