Title
Cross-jurisdictional income shifting and tax enforcement : evidence from public versus private multinationals
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
Subject
Economics
Source (journal)
Review of accounting studies
Volume/pages
20(2015) :2 , p. 710-746
ISSN
1380-6653
ISI
000353813200004
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
This paper examines the impact of tax enforcement and public listing status on income shifting by multinational corporations (MNCs). For a sample of over 8,000 subsidiaries that are majority-owned by 959 European MNCs over the period 19982009, we find strong evidence of income shifting from high to low tax countries and that income is shifted more out of high-tax countries when local tax enforcement is weak. In addition, we show that private MNCs exploit weak tax enforcement more to shift income out of the parent country compared to public MNCs. Combined, our results suggest that tax enforcement plays a crucial role in MNC income shifting decisions and that shifting is more aggressive when MNCs are less affected by nontax shifting costs as is the case in private MNCs.
E-info
https://repository.uantwerpen.be/docman/iruaauth/c33093/2e2cbbf2bf8.pdf
Full text (open access)
https://repository.uantwerpen.be/docman/irua/843d73/9319.pdf
E-info
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Handle