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Profit Shifting of Multinational Corporations Worldwide

Javier Garcia-Bernardo and Petr Jansk\'y
Authors registered in the RePEc Author Service: Petr Janský

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Abstract: We exploit the new country-by-country reporting data of multinational corporations, with unparalleled country coverage, to reveal the distributional consequences of profit shifting. We estimate that multinational corporations worldwide shifted over \$850 billion in profits in 2017, primarily to countries with effective tax rates below 10\%. Countries with lower incomes lose a larger share of their total tax revenue due to profit shifting. We further show that a logarithmic function is better suited for capturing the non-linear relationship between profits and tax rates than linear or quadratic functions. Our findings highlight effective tax rates' importance for profit shifting and tax reforms.

Date: 2022-01, Revised 2023-12
New Economics Papers: this item is included in nep-cna, nep-int and nep-pbe
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Citations: View citations in EconPapers (4)

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Journal Article: Profit shifting of multinational corporations worldwide (2024) Downloads
Working Paper: Profit Shifting of Multinational Corporations Worldwide (2023) Downloads
Working Paper: Profit Shifting of Multinational Corporations Worldwide (2021) Downloads
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