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

46 Pages Posted: 22 Aug 2018

See all articles by Sebastian Beer

Sebastian Beer

Oesterreichische Nationalbank (OeNB); Vienna University of Economics and Business - Department of Economics

Ruud A. De Mooij

International Monetary Fund (IMF); CESifo (Center for Economic Studies and Ifo Institute); Oxford University Centre for Business Taxation

Li Liu

International Monetary Fund (IMF)

Date Written: July 2018

Abstract

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.

Keywords: Corporate taxation, Corporate taxation; Multinationals; Profit shifting; International tax avoidance; Meta analysis, Multinationals, Profit shifting, International tax avoidance, Meta analysis, Business Taxes and Subsidies

JEL Classification: F23, H25

Suggested Citation

Beer, Sebastian and De Mooij, Ruud A. and Liu, Li, International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots (July 2018). IMF Working Paper No. 18/168. Available at SSRN: https://ssrn.com/abstract=3236783

Sebastian Beer (Contact Author)

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3
1090 Vienna
Austria

Vienna University of Economics and Business - Department of Economics ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Ruud A. De Mooij

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Oxford University Centre for Business Taxation ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

HOME PAGE: http://people.few.eur.nl/demooij/

Li Liu

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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