Multinational Tax Avoidance and Anti-Avoidance Enforcement: Firm-level Evidence from Developing ASEAN Countries

Athiphat Muthitacharoen and Krislert Samphantharak

No 111, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: We use firm-level data from ASEAN5 to examine the significance of tax-motivated profit shifting by multinational enterprises and to analyze how anti-avoidance measures mitigate the profit shifting. We show that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone, and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important implications for developing countries with weak governance but dependent on MNEs.

Keywords: Profit Shifting; Tax Avoidance; Auditing; Transfer Pricing; Multinational Enterprise (search for similar items in EconPapers)
JEL-codes: F23 H25 H26 K34 M42 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: MULTINATIONAL TAX AVOIDANCE AND ANTI-AVOIDANCE ENFORCEMENT: FIRM-LEVEL EVIDENCE FROM DEVELOPING ASEAN COUNTRIES (2022)
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