International tax planning within the structure of corporate entities owned by the shareholder-individual through Panama Papers destinations

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F20%3A43914687" target="_blank" >RIV/62156489:43110/20:43914687 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.1111/dpr.12403" target="_blank" >https://doi.org/10.1111/dpr.12403</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1111/dpr.12403" target="_blank" >10.1111/dpr.12403</a>

Result language

angličtina

Original language name

International tax planning within the structure of corporate entities owned by the shareholder-individual through Panama Papers destinations

Original language description

Motivation: Panama Papers scandal opened discussions about the importance of financial secrecy, anonymous ownership and/or shell companies with respect to a profit-shifting and an avoidance of taxation. Therefore we would like to indicate the importance of international tax planning within the structure of corporate entities owned by shareholder-indiviudal through Panama Papers destinations. Purpose: As Panama Papers scandal identified individuals from European member states, who used Panama Papers destinations for avoiding taxation, our main research questions were to identify profit-shifting channels and consequently to estimate related government revenue losses. Methods: As a research method we applied micro- data analysis of financial statements of multinational companies (MNEs) owned by the shareholder-individual. We used the data on companies from Amadeus/Orbis database. The results of our paper is based on the comparison of the two groups (with and without links to Panama Papers tax havens) and calculated profit-shifting indicators. Findings: Our research identified that generally the profit-shifting is done through the shift of operating revenues or the costs, however the use of debt channel in profit-shifting is also important. Further, we determined that the group with the link to tax haven has by 16.62% lower tax payable per unit of profit before tax and in order to generate one unit of profit before taxation it is enough to generate by 62.55% lower operating revenue. Finally, related government revenue losses were determined in the amount of 8.67 billion euros. Policy implication: Our results are of relevance for the discussions of the European Commission&apos;s newly proposed Common Consolidated Corporate Tax Base (CCCCTB) proposal which can freeze the current state of profit-shifting out of the European Union into tax havens. Further, our research highlights the importance of the establishment of the registries of ultimate beneficiary owners in EU Members States. As this data gained from this registry can be used for the direct research of the involvement of shareholders-individuals in profit-shifting.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50206 - Finance

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

2020

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Development Policy Review

ISSN

0950-6764

e-ISSN

—

Volume of the periodical

38

Issue of the periodical within the volume

1

Country of publishing house

US - UNITED STATES

Number of pages

16

Pages from-to

124-139

UT code for WoS article

000619418000007

EID of the result in the Scopus database

2-s2.0-85075470964