Successful IRS enforcement of corporate transfer pricing regulations is by all measures at an all-time low, and profit shifting from transfer pricing appears to be near an all-time high, costing the U.S. federal and state treasuries as much $140 billion dollars or more per annum in recent years,...

This study analyzes whether tax incentives play a role in 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 U.S. trademark ownership. Still, the probability to offshore legal...

Recent empirical evidence suggests that domestic firms avoid taxes at least to the same extent as multinational firms. We extend this finding by developing an approach to estimate the average statutory tax rate from publicly available data that implicitly weights all statutory tax rates a firm...

We examine the value to U.S. multinational firms of shifting income from high- to low-tax jurisdictions. Such shifting is common and sizable, yet the shareholder consequences are heretofore unknown. Using a novel income shifting measure and identification strategy from Demeré and Gramlich...

Using pairs of similar US and European firms listed on the S&P500 or StoxxEurope600, we examine effective tax differentials between US multinational corporations (MNCs) and their European peers. We show that statutory tax rates and profit shifting opportunities are important determinants of...

The 2017 Tax Cut and Jobs Act reduced the US corporate tax rate and introduced provisions to curb profit shifting. We combine survey data, tax data, and firm financial statements to study the evolution of the geographical allocation of US firms' profits after the reform. The share of profits...

This paper examines the effects of the 2017 U.S. tax reform, commonly known as the ‘Tax Cuts and Jobs Act’ [TCJA] on cross-border M&As of U.S. acquirers. The TCJA replaced the U.S. worldwide tax system by a territorial system, albeit with one important exception: the ‘Global Intangible...

Using pairs of similar US and European firms listed on the S&P500 or StoxxEurope600, we examine effective tax differentials between US multinational corporations (MNCs) and their European peers. We show that statutory tax rates and profit shifting opportunities are important determinants of...

I leverage a Pakistani tax reform that cuts the tax rate on the supply chains of five major industries of the country from 15% to 0% to cast light on the extent of, and mechanisms driving, VAT noncompliance in a representative emerging economy. I find that firms overclaim refunds by 22% and...

We examine U.S. multinationals' choice of tax avoidance strategies. We find that firms capable of one strategy (profit shifting) are less likely to use a different strategy (inversion), even though inverting would eliminate higher repatriation-related taxes faced by profit-shifting firms. Three...