The issue of base erosion and profit shifting has been on the international policy agenda for several years now. The aim of this paper is to examine how firms adjust their profit shifting mechanisms in a changing institutional environment. In particular, we test whether firms substitute one...

Unternehmen der digitalen Wirtschaft wie Google, Facebook, Amazon usw. sind in Europa allgegenwärtig, zahlen aber nur wenig Steuern. Die Finanzminister einiger wichtiger EUMitgliedstaaten haben deshalb eine umsatzbasierte Ausgleichsteuer auf Internetunternehmen vorgeschlagen. Ein solches...

In this paper, I investigate the influence of tax incentives on the financial structures of mergers and acquisitions (M&A) conducted by multinational entities (MNE). Previous research has already found evidence for tax avoidance by debt shifting. I analyze the importance of locating debt at...

International corporate tax avoidance by multinational enterprises likely lowers the Czech Republic's corporate income tax revenue, but it is not clear by how much. To clarify this I first review existing estimates of the costs of international corporate tax avoidance to government revenue...

This paper examines location choices of multinational enterprises (MNEs). We particularly focus on the consequences of double taxation treaties (DTTs) and corporate profit taxes on the probability to choose a location. DTTs have become a key policy instrument used by countries to regulate...

Tax treaties between countries influence how much tax revenues governments receive from multinational enterprises. These treaties often reduce the withholding tax rates on outgoing dividend and interest payments. We provide illustrative estimates of costs for these two taxes for 14 developing...

The OECD Base Erosion Profit Shifting (BEPS) Initiative as well as the current fairness oriented public discussion regarding the taxation of digital business models highlight the importance and complexity of the arm's length principle. In a theoretical model of an internationally fragmented...

The "fair" taxation of digital business models is challenging. One of the key aspects - both policy makers and the public opinion consider as most pressuring - is the determination of intragroup transfer prices for intangibles used in digital business models. In this paper, we address the issue...

This paper examines the determinants and margins of profit shifting through transfer pricing. We develop a theory model, where transfer pricing patterns are governed by a generalized concealment cost function (CCF). Our empirical analysis draws on micro-level data about transaction-level...

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs...