Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288422 
Year of Publication: 
2020
Citation: 
[Journal:] International Tax and Public Finance [ISSN:] 1573-6970 [Volume:] 28 [Issue:] 3 [Publisher:] Springer US [Place:] New York, NY [Year:] 2020 [Pages:] 717-745
Publisher: 
Springer US, New York, NY
Abstract: 
This paper investigates how multinational banks use internal debt to shift profits to low-taxed affiliates. Using regulatory data on multinational banks headquartered in Germany, we show that banks use this tax avoidance channel more aggressively than non-financial multinationals do. We find that a ten percentage points higher corporate tax rate increases the internal net debt ratio by 5.7 percentage points, corresponding to a 20% increase at the mean. Our study also takes into account the existence of conduit entities, which simply pass through financial flows. If conduit entities are systematically located in low-tax countries, previous studies may have underestimated the extent of debt shifting.
Subjects: 
Profit shifting
Internal debt
Multinational banks
Taxation
JEL: 
H25
G21
F23
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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