Fiscal Consequences of Corporate Tax Avoidance

Katarzyna Bilicka, Evgeniya Dubinina () and Petr Janský
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Evgeniya Dubinina: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czechia

No 2023/13, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: We study the consequences of multinational tax avoidance on the structure of government tax revenues. To motivate our analysis, we show that countries with high revenue losses due to profit shifting have lower corporate tax revenues and rates and higher indirect tax revenues and rates. To establish causality, we use German municipal data and analyse how changes in municipal trade tax rates levied on corporate profits affect local tax revenue structure. Following a trade tax rate increase, we find that municipalities with high exposure to aggressive multinationals experience a significant decline in trade tax revenue levels and shares.

Keywords: Corporate Tax Avoidance; Profit Shifting; Multinational Corporations; Government Tax Revenue Structure (search for similar items in EconPapers)
JEL-codes: E62 H26 H71 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2023-05, Revised 2023-05
New Economics Papers: this item is included in nep-des, nep-eur, nep-pbe and nep-pub
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https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6760 (application/pdf)

Related works:
Working Paper: Fiscal Consequences of Corporate Tax Avoidance (2023)
Working Paper: Fiscal Consequences of Corporate Tax Avoidance (2023)
Working Paper: Fiscal Consequences of Corporate Tax Avoidance (2023)
Working Paper: Fiscal consequences of corporate tax avoidance (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2023_13

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