Does eliminating international profit shifting increase tax revenue in high-tax countries?

Patrice Pieretti and Giuseppe Pulina

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We analyze under which conditions initiatives intended to eliminate profit shifting (such as the OECD BEPS action plan) can be successful given that these actions may induce multinational companies to relocate ac- tivities in low-tax countries. We demonstrate that removing tax-motivated profit shifting increases tax revenue in the onshore region if the low-tax jurisdiction is not too efficient in providing attractive infrastructure. This result is more likely to be obtained when the high-tax country is able to counter international activity shifting by competing in infrastructure with the tax haven rather than being passive

Keywords: BEPS; Profit shifting; Activity shifting; Tax havens; Multinational firms (search for similar items in EconPapers)
JEL-codes: F21 F23 H25 H26 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Does eliminating international profit shifting increase tax revenue in high-tax countries? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:15-13

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