Comparing UK Tax Returns of Foreign Multinationals to Matched Domestic Firms

American Economic Review, 2019, 109(8), 2921-53

40 Pages Posted: 17 Oct 2020

See all articles by Katarzyna Anna Bilicka

Katarzyna Anna Bilicka

Utah State University; University of Oxford - Oxford University Centre for Business Taxation

Date Written: March 5, 2019

Abstract

In this paper, I use confidential UK corporate tax returns data to explore whether there are systematic differences in the amount of taxable pro fits that multinational and domestic companies report. I find that the ratio of taxable pro fits to total assets reported by foreign multinational subsidiaries is half that of comparable domestic standalone. The majority of the difference is attributable to the fact that a higher proportion of foreign multinational subsidiaries report zero taxable profits. I document how the estimated difference is related to profit shifting and show that using accounting data leads to much smaller estimates of the difference.

JEL Classification: H25, H32

Suggested Citation

Bilicka, Katarzyna Anna, Comparing UK Tax Returns of Foreign Multinationals to Matched Domestic Firms (March 5, 2019). American Economic Review, 2019, 109(8), 2921-53, Available at SSRN: https://ssrn.com/abstract=3682277 or http://dx.doi.org/10.2139/ssrn.3682277

Katarzyna Anna Bilicka (Contact Author)

Utah State University ( email )

Logan, UT 84322
United States

University of Oxford - Oxford University Centre for Business Taxation ( email )

Saïd Business School
Park End Street
Oxford, OX1 1HP
United Kingdom

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