The Impact of Offshore Profit Shifting on the Measurement of GDP: The Case of the UK

Giordano Mion and Manuel Tong Koecklin

Economic Statistics Centre of Excellence (ESCoE) Discussion Papers from Economic Statistics Centre of Excellence (ESCoE)

Abstract: In this paper we analyse the global distribution of profits declared by MNEs operating in the UK using the Orbis database. Our investigations cover the period 2007-2017 and focus on entities reporting non-consolidated accounts and belonging to corporate Global Ultimate Owners active worldwide. Our analyses suggest that, compared to actual declared profits, profits distributed according to a simple apportionment rule based on companies’ revenues shares within each MNE group would look quite different. For example, MNEs operating in the UK reported in 2017 41 billion GBP (representing about 1.91 per cent of UK GDP) more than what they would have reported based on our apportionment rule. We document this and other findings and while also digging deeper in terms of industry patterns and providing a number of robustness checks.

Keywords: apportionment; intangible assets; orbis; united kingdom; profit shifting (search for similar items in EconPapers)
JEL-codes: E01 F23 (search for similar items in EconPapers)
Date: 2021-06
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Citations: View citations in EconPapers (1)

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