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This paper provides a quantitative review of the empirical literature on profit-shifting behavior of multinational firms. We synthesize the evidence from 25 studies and find a substantial response of profit measures to international tax rate differentials. Accounting for misspecification biases by means of meta-regressions, we predict a tax semi-elasticity of subsidiary pre-tax profits of about 0.8. Moreover, we disentangle the tax response by means of financial planning from the transfer pricing and licensing channel. Our results suggest that transfer pricing and licensing are the dominant profit-shifting channel.

This paper explores whether corporate tax bias toward debt finance differs between banks and nonbanks,using a large panel of micro data. On average, it finds that there is no significant difference. The marginal tax effect for both banks and non-banks is close to 0.2. However, the responsiveness differs considerably across the size distribution and the conditional leverage distribution. For nonbanks, we find a U-shaped relationship between asset size and tax responsiveness, although this pattern does not hold universally across the conditional leverage distribution. For banks, in contrast,the

AbstractThis paper provides a quantitative review of the empirical literature on profit‐shifting behaviour of multinational firms. We synthesize the evidence from 27 studies and find a substantial response of profit measures to international tax rate differentials. Accounting for confounding factors by means of meta‐regressions, we predict a tax semi‐elasticity of subsidiary pre‐tax profits of about 0.8. Moreover, we disentangle the tax response by means of financial planning from the transfer pricing and licensing channel. Back‐of‐the‐envelope calculations suggest that transfer pricing and licensing are the dominant profit‐shifting channels.

Despite the continuing political interest in the usefulness of tax competition and tax coordination as well as the wealth of theoretical analyses, it still remains open whether or when tax competition is harmful. Moreover, the influence of tax differentials on multinationals' decisions is still insufficiently analyzed. Thus, economists have increasingly resorted to empirical analysis in order to gain insights on the elasticity of FDI with respect to company taxation. As a result, the empirical literature on taxation and international capital flows has grown to a similar abundance during the last 25 years as the respective theoretical literature. Its heterogeneity leads to a rising need for concise reviews on the existing empirical evidence. In this paper we extend former meta-analyses on FDI and taxation in three ways. First, we add the most recent publications unconsidered in meta-analyses up-to-date. Second, we apply a different methodology by using a broad set of meta-regression estimators and explicitly discuss which one is most suitable for application to our meta-data. Third, we address some important issues in research on FDI and taxation to the clarification of which meta-analysis can make valuable contributions. These issues are mainly: The influence of variables which might moderate effects of tax differentials (e.g. public spending), the implications of using aggregate FDI data as opposed to firm-level information on measured tax effects, the implications of bilateral effective tax rates, and the possible presence of publication bias in primary research.

Despite the continuing political interest in the usefulness of tax competition and tax coordination as well as the wealth of theoretical analyses, it still remains open whether or when tax competition is harmful. Moreover, the influence of tax differentials on multinationals' decisions is still insufficiently analyzed. Thus, economists have increasingly resorted to empirical analysis in order to gain insights on the elasticity of FDI with respect to company taxation. As a result, the empirical literature on taxation and international capital flows has grown to a similar abundance during the last 25 years as the respective theoretical literature. Its heterogeneity leads to a rising need for concise reviews on the existing empirical evidence. In this paper we extend former meta-analyses on FDI and taxation in three ways. First, we add the most recent publications unconsidered in meta-analyses up-to-date. Second, we apply a different methodology by using a broad set of meta-regression estimators and explicitly discuss which one is most suitable for application to our meta-data. Third, we address some important issues in research on FDI and taxation to the clarification of which meta-analysis can make valuable contributions. These issues are mainly: The influence of variables which might moderate effects of tax differentials (e.g. public spending), the implications of using aggregate FDI data as opposed to firm-level information on measured tax effects, the implications of bilateral effective tax rates, and the possible presence of publication bias in primary research.

Dieser Beitrag untersucht umfassend die Unternehmensbesteuerung in der Europäischen Union im Zeitraum von 1998 bis 2007. Das innereuropäische Steuergefälle wird unter Rückgriff auf zwei zentrale Maßgrößen die Kapitalkosten und die effektive Durchschnittssteuerbelastung abgebildet. Die Berechnungen auf Grundlage der Methodik nach Devereux und Griffith erlauben dabei die Messung der Steuerbelastung auf rein inländische als auch auf grenzüberschreitende (Direkt)Investitionen. Die eingehende Analyse der auf diese Weise detailliert quantifizierten Besteuerungsregime zeigt unter anderem, dass in der EU das Prinzip der Kapitalimportneutralität gegenüber einer Verwirklichung von Kapitalexportneutralität klar dominiert. Die nicht realisierte Harmonisierung der Unternehmensbesteuerung impliziert Produktionsineffizienzen aufgrund steuerlich verzerrter Investitions und Standortentscheidungen sowie Wettbewerbsverzerrungen. -- Effektive Steuerbelastung ; Europäische Union ; Unternehmensbesteuerung

This study analyzes whether tax incentives affect the geographical allocation of U.S. trademark rights within large multinational enterprises. Considering the S&P 500 firms, we find a strong home country concentration of US. trademark ownership. Our results suggest that offshore ownership of trademarks is mainly motivated by foreign activities rather than tax considerations. An analysis of the location choice reveals a significant negative impact of host-country taxes but only if controlled foreign-company legislation does not apply. Companies active in industries that are known for producing mobile income tend to hold more trademarks offshore. In particular, trademarks of software firms and drugmakers are overrepresented in tax havens. European multinationals share similar location preferences.

Dieser Beitrag untersucht umfassend die Unternehmensbesteuerung in der Europäischen Union im Zeitraum von 1998 bis 2007. Das innereuropäische Steuergefälle wird unter Rückgriff auf zwei zentrale Maßgrößen - die Kapitalkosten und die effektive Durchschnittssteuerbelastung - abgebildet. Die Berechnungen auf Grundlage der Methodik nach Devereux und Griffith erlauben dabei die Messung der Steuerbelastung auf rein inländische als auch auf grenzüberschreitende (Direkt-)Investitionen. Die eingehende Analyse der auf diese Weise detailliert quantifizierten Besteuerungsregime zeigt unter anderem, dass in der EU das Prinzip der Kapitalimportneutralität gegenüber einer Verwirklichung von Kapitalexportneutralität klar dominiert. Die nicht realisierte Harmonisierung der Unternehmensbesteuerung impliziert Produktionsineffizienzen aufgrund steuerlich verzerrter Investitions- und Standortentscheidungen sowie Wettbewerbsverzerrungen.