Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247381 
Year of Publication: 
2021
Series/Report no.: 
IES Working Paper No. 14/2021
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
We exploit the new multinational corporations' country-by-country reporting datawith unparalleled country coverage to study profit shifting to tax havens. We showthat a logarithmic function is preferable to linear and quadratic ones for modelling the extremely non-linear relationship between profits and tax rates. Using thismethodology, we reveal that multinational corporations shifted US$1 trillion of profits in 2016 and that those headquartered in the United States and China did so most aggressively. We establish that the Cayman Islands is the largest tax haven, whereas countries with lower incomes tend to lose more tax revenue relative to total tax revenues.
Subjects: 
multinational corporation
corporate taxation
profit shifting
effective tax rate
country-by-country reporting
global development
JEL: 
F23
H25
H26
H32
Document Type: 
Working Paper

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