Tax Haven Ties and the Profitability of Foreign Owned Companies

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F19%3A43916571" target="_blank" >RIV/62156489:43110/19:43916571 - isvavai.cz</a>
Result on the web
<a href="https://is.muni.cz/do/econ/sborniky/2019/Proceedings_final.pdf" target="_blank" >https://is.muni.cz/do/econ/sborniky/2019/Proceedings_final.pdf</a>
DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Tax Haven Ties and the Profitability of Foreign Owned Companies
Original language description
Tax haven countries are the prevalent territories chosen by the Multinational Enterprises to place their income in order to avoid tax burden. By exploiting tax differences and preferential tax regimes, the Multinational Enterprises can engage in profit shifting in order to decrease the corporate income tax. This paper aims to analyze the impact of links with tax haven countries on the profitability of foreign owned companies based in the Czech Republic. The objective of this research is to investigate whether Czech subsidiaries that have sister companies based in tax haven countries report less profit before taxation. We adopt the stochastic frontier model to estimate the effect of links with tax haven on the output inefficiency reported by the Czech companies. We focus our empirical analysis on the firm-level data and their ties with 50 world tax haven countries. The links with tax havens are expected to have a negative impact of company efficiency, proxied by profit before taxation. This negative effect represents an indirect evidence of profit shifting from the Czech Republic to tax haven countries.
Czech name
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Czech description
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Project
<a href="/en/project/GA18-14082S" target="_blank" >GA18-14082S: Fair corporate taxation: Measurement of the impact of the corporate profit shifting on the budget of the Czech Republic</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year
2019
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection
European Financial Systems 2019: Proceedings of the 16th International Scientific Conference
ISBN
978-80-210-9338-6
ISSN
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e-ISSN
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Number of pages
9
Pages from-to
400-408
Publisher name
Masarykova univerzita
Place of publication
Brno
Event location
Brno
Event date
Jun 24, 2019
Type of event by nationality
WRD - Celosvětová akce
UT code for WoS article
000503222600047

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