Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F19%3A10394907" target="_blank" >RIV/00216208:11230/19:10394907 - isvavai.cz</a>

Výsledek na webu

<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=kJWuowT2Qx" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=kJWuowT2Qx</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1007/s10797-019-09547-8" target="_blank" >10.1007/s10797-019-09547-8</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment

Popis výsledku v původním jazyce

Governments&apos; revenues are lower when multinational enterprises avoid paying corporate income tax by shifting their profits to tax havens. In this paper, we ask which countries&apos; tax revenues are affected most by this tax avoidance and how much. To estimate the scale of profit shifting, we begin by observing that the higher the share of foreign direct investment from tax havens, the lower the reported rate of return on this investment. Similarly to the United Nations Conference on Trade and Development&apos;s World Investment Report 2015, we argue that the reported rate of return is lower due to profit shifting. Unlike the report, however, we provide illustrative country-level estimates of profit shifting for as many countries as possible, including low-income ones, which enables us to study the distributional effects of international corporate tax avoidance. We compare estimated corporate tax revenue losses, relative to their GDP and tax revenues, of country groups classified by income per capita and we find that there are almost no statistically significant differences across these groups. Furthermore, we compare our results with four other recent studies that use different methodologies to estimate tax revenue losses due to profit shifting. In the first such comparison made, we find that most studies identify some differences across income groups, but the nature of these differences varies across the studies.

Název v anglickém jazyce

Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment

Popis výsledku anglicky

Governments&apos; revenues are lower when multinational enterprises avoid paying corporate income tax by shifting their profits to tax havens. In this paper, we ask which countries&apos; tax revenues are affected most by this tax avoidance and how much. To estimate the scale of profit shifting, we begin by observing that the higher the share of foreign direct investment from tax havens, the lower the reported rate of return on this investment. Similarly to the United Nations Conference on Trade and Development&apos;s World Investment Report 2015, we argue that the reported rate of return is lower due to profit shifting. Unlike the report, however, we provide illustrative country-level estimates of profit shifting for as many countries as possible, including low-income ones, which enables us to study the distributional effects of international corporate tax avoidance. We compare estimated corporate tax revenue losses, relative to their GDP and tax revenues, of country groups classified by income per capita and we find that there are almost no statistically significant differences across these groups. Furthermore, we compare our results with four other recent studies that use different methodologies to estimate tax revenue losses due to profit shifting. In the first such comparison made, we find that most studies identify some differences across income groups, but the nature of these differences varies across the studies.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50201 - Economic Theory

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2019

Kód důvěrnosti údajů

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

Název periodika

International Tax and Public Finance

ISSN

0927-5940

e-ISSN

—

Svazek periodika

26

Číslo periodika v rámci svazku

5

Stát vydavatele periodika

NL - Nizozemsko

Počet stran výsledku

56

Strana od-do

1048-1103

Kód UT WoS článku

000483757000005

EID výsledku v databázi Scopus

2-s2.0-85067277973