Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93081
Authors: 
Evers, Maria Theresia
Meier, Ina
Spengel, Christoph
Year of Publication: 
2014
Series/Report no.: 
ZEW Discussion Papers 14-015
Abstract: 
Aggressive tax planning efforts of highly profitable multinational companies (Base Erosion and Profit Shifting (BEPS)) have recently become the subject of intense public debate. As a response, several international initiatives and parties have called for more transparency in financial reporting, especially by means of a country-specific reporting of certain tax information (Country-by-Country Reporting (CbCR)). In our paper, we demonstrate that neither consolidated nor individual financial accounts seem to be an appropriate platform to provide such country-specific information and, therefore, that CbCR cannot be based on extended financial accounting standards. Moreover, we argue that even separate CbCR templates do not prevent multinationals from profit shifting, since their common tax minimization strategies are mainly based on the legal exploitation of gaps and loopholes in national and international tax law. In that regard, we show that expected costs for CbCR would exceed expected benefits and therefore contend that CbCR cannot be regarded as a convincing measure to combat international profit shifting. Instead, we argue that tax legislators should limit profit shifting by enforcing national and international tax rules and by closing gaps in tax law. In particular, we call for more tightened and standardized transfer pricing regulations to be adopted at an international level.
Subjects: 
tax avoidance
profit shifting
multinational firms
tax reform
tax reporting
country-by-country reporting
international transfer pricing
JEL: 
H20
H26
F23
K34
M41
Document Type: 
Working Paper

Files in This Item:
File
Size
381.97 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.