Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/180323
Authors: 
Köthenbürger, Marko
Liberini, Federica
Stimmelmayr, Michael
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7061
Abstract: 
Patent box regimes have become increasingly popular as an instrument to attract taxable income from intellectual property (IP). This paper assesses the quantitative impact of patent box regimes on profit shifting by multinational enterprises (MNEs). We proxy the ability to access the tax benefit of the patent box by historical IP ownership. On average, affiliates belonging to MNEs with historical IP ownership report, after the introduction of a patent box, 8.5 percent higher profit compared to their counterparts with no IP ownership. Patent boxes do not only lure reported profit. The pre-tax profit change is a net effect and thus also accounts for reversed internal debt shifting out of the country and productivity changes. The overall behavioral adjustments might lower corporate tax revenues. Further, the design of the patent box and the existence of a tax haven affiliate within an MNE turn out to be critical for the amount of profits shifted.
Subjects: 
corporate tax avoidance
patent box
multinational enterprise
profit shifting
JEL: 
H25
H26
F23
C21
C23
Document Type: 
Working Paper

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