Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279164 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10415
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study the consequences of multinational tax avoidance on the structure of government tax revenues. To motivate our analysis, we show that countries with high revenue losses due to profit shifting have lower corporate tax revenues and rates and higher indirect tax revenues and rates. To establish causality, we use German municipal data and analyse how changes in municipal trade tax rates levied on corporate profits affect local tax revenue structure. Following a trade tax rate increase, we find that municipalities with high exposure to aggressive multinationals experience a significant decline in trade tax revenue levels and shares.
Subjects: 
corporate tax avoidance
profit shifting
multinational corporations
government tax revenue structure
JEL: 
E62
H26
H71
Document Type: 
Working Paper
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