Base Erosion, Profit Shifting and Developing Countries

By Ernesto Crivelli, Ruud A. de Mooij, Michael Keen

May 29, 2015

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Ernesto Crivelli, Ruud A. de Mooij, and Michael Keen. Base Erosion, Profit Shifting and Developing Countries, (USA: International Monetary Fund, 2015) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

International corporate tax issues are prominent in public debate, notably with the G20-OECD project addressing Base Erosion and Profit Shifting (‘BEPS’). But while there is considerable empirical evidence for advanced countries on the cross-country fiscal externalities at the heart of these issues, there is almost none for developing countries. This paper uses panel data for 173 countries over 33 years to explore their magnitude and nature, focusing particularly on developing countries and applying a new method to distinguish between spillover effects through real decisions and through avoidance —and quantify the revenue impact of the latter. The results suggest that spillover effects on the tax base are if anything a greater concern for developing countries than for advanced—and a significant one.

Subject: Average effective tax rate, Corporate income tax, Financial sector policy and analysis, Revenue administration, Spillovers, Tax avoidance, Tax policy, Taxes

Keywords: Average effective tax rate, BEPS, Caribbean, CIT base, Competition literature, Corporate income tax, International taxation, Profit shifting, Rate spillover, Simple average, Spillover effect, Spillover equation, Spillovers, Sub-Saharan Africa, Tax avoidance, Tax haven, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/118
Stock No:

WPIEA2015118
ISBN:

9781513563831
ISSN:

1018-5941

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