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A Fistful of Dollars? Foreign Sales Platforms and Profit Shifting in Tax Havens

Sébastien Laffitte () and Farid Toubal

Working Papers from CEPII research center

Abstract: Using public macro-level data on activities of multinationals, we document that U.S. firms geographically disconnect sales and production to avoid paying corporate taxes. We revisit both theoretically and empirically the location determinants of foreign platforms and show that market access motives are far less relevant when considering tax havens. We characterize these countries and shed light on the attractiveness of different tax havens for specific sectors of activity. Our quantification shows that profit shifting by foreign sales platforms in tax havens amounts to about $80bn in 2013. Our findings contribute to the recent policy debate on the reform of international taxation.

Keywords: International Taxation; Tax avoidance; Foreign platforms; Tax havens; Profit shifting; Firms' organization (search for similar items in EconPapers)
JEL-codes: F23 H26 H73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2019-01
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