Trade in services related to intangibles and the profit shifting hypothesis

Nadia Accoto (), Stefano Federico and Giacomo Oddo
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Nadia Accoto: Bank of Italy

No 1414, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper focuses on the international trade in services related to intangible assets and intellectual property products (IPP) and explores to what extent they might be used as a channel to shift the profits of multinational firms to tax havens. Using survey data on Italian firms, we first provide a geographical and sectoral analysis of Italy's trade in IPP services. We then estimate the amount of profit shifted abroad by foreign-owned firms in our sample, applying the methodology initially put forward by Tørsløv et al. (2018) at various levels of aggregation. Finally, we look for a correlation at the firm level between estimated shifted profits and imports of IPP services. We find that, while the overall correlation is very low, there is a small cluster of firms displaying a positive correlation between these two variables.

Keywords: trade in services; intellectual property products; MNEs; profit shifting (search for similar items in EconPapers)
JEL-codes: F14 F23 H26 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (1)

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