IMF Working Papers

International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots

By Sebastian Beer, Ruud A. de Mooij, Li Liu

July 23, 2018

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Sebastian Beer, Ruud A. de Mooij, and Li Liu. International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots, (USA: International Monetary Fund, 2018) accessed November 14, 2024

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Summary

This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral and corporate inversions. Moreover, it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1 percent—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.

Subject: Corporate income tax, Corporate taxes, National accounts, Personal income, Revenue administration, Tax avoidance, Taxes

Keywords: Company debt, Company transaction, Consensus estimate, Corporate income tax, Corporate taxation, Corporate taxes, Debt shifting, Dependent variable, Elasticity estimate, Firm FE, Global, Host-country tax, International tax avoidance, Meta analysis, Multinationals, Passive income, Personal income, Profit reallocation, Profit shifting, Residence country, Single tax, Tax avoidance, Tax rate, WP

Publication Details

  • Pages:

    45

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/168

  • Stock No:

    WPIEA2018168

  • ISBN:

    9781484363997

  • ISSN:

    1018-5941