How Large is the Corporate Tax Base Erosion and Profit Shifting? A General Equilibrium Approach
Salvador Barrios (),
Diego d'Andria (),
Gaëtan Nicodème () and
Authors registered in the RePEc Author Service: Maria Teresa Alvarez Martinez ()
No 12637, CEPR Discussion Papers from C.E.P.R. Discussion Papers
This paper estimates the size and macroeconomic effects of base erosion and profit shifting (BEPS) using a computable general equilibrium model designed for corporate taxation and multinationals. Our central estimate of the impact of BEPS on corporate tax losses for the EU amounts to €36 billion annually or 7.7% of total corporate tax revenues. The USA and Japan also appear to loose tax revenues respectively of €101 and €24 billion per year or 10.7% of corporate tax revenues in both cases. These estimates are consistent with gaps in bilateral multinationals' activities reported by creditor and debtor countries using official statistics for the EU. Our results suggest that by increasing the cost of capital, eliminating profit shifting would slightly reduce investment and GDP. It would however raise corporate tax revenues thanks to enhanced domestic production. This in turn could reduce other taxes and increase welfare.
Keywords: BEPS; CGE model; Corporate taxation; Profit shifting; Tax avoidance (search for similar items in EconPapers)
JEL-codes: C68 E62 H25 H26 H87 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Working Paper: How Large is the Corporate Tax Base Erosion and Profit Shifting? A General Equlibrium Approach (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12637
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=12637
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().