Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185369
Authors: 
Laffitte, Sébastien
Toubal, Farid
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper 7171
Abstract: 
Using aggregate data on U.S. multinational firms’ activities, we document the impact of tax havens on the organization and trade of multinational firms. Conventional wisdom says that MNEs set up foreign sales platforms close to large markets to benefit from the proximity to consumers. We show, both theoretically and empirically, that the tax environment plays an important role in explaining the location of the foreign sales platforms. We document that foreign sales platforms in tax havens fuel profit shifting especially in services industries. We shed lights on the attractiveness of different tax havens for distinctive sectoral activities. The back-of-the-envelope computation shows that profit shifting by foreign sales platforms in tax haven amounts to $83bn in 2013.
Subjects: 
foreign platforms
tax havens
profit shifting
firms’ organization
JEL: 
F23
H26
Document Type: 
Working Paper

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