An advance pricing agreement (APA) is a formal arrangement between a tax authority and a multinational enterprise (MNE) in which the parties jointly agree on the MNE's transfer pricing methodology, estimated taxable income and tax payments for a fixed period, thus reducing the likelihood of an...

When multinationals face lower tax rates abroad than in the US, transfer pricing strategies generate an asymmetry in the tax rates on a project's profits and losses. We show that the tax savings from transfer pricing can be expressed as a long position in a call option. We use a model to show...

We study the economic effects of unilateral adoption of corporate tax policies that include destination-based taxes and/or cash ow taxes in a heterogeneous agent model in which multinational firms can endogenously shift income between countries using transfer prices. Standard pass through...

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...

This paper examines if, when, and to what extent international income shifting incentives explain where multinational firms move offshored U.S. jobs. Using a small, detailed sample of offshored jobs from a program within the Department of Labor called Trade Adjustment Assistance (TAA), I find...

This study provides evidence on a significant real consequence of an opaque financial reporting information environment: increased corporate tax avoidance. Using an international sample of firms, I find that firms with a more opaque information environment, as measured at both the firm and...

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...

Much work has been done by international organizations, tax scholars around the world and business experts on the future shape of the taxation of the digitalized economy. Starting from the assumption that any “ring-fencing” of the digitalized economy should be avoided, it is far from easy to...

For tax purposes, Belgium allows companies to take into account an NID on their equity. This regime enables companies to tax corporate profits in Belgian finance companies virtually for free. This case study presents in a first step how such finance companies can be set up. Then, using a unique...

We investigate real investment, financial revenues and profits in formerly domestic firms once they enter a multinational entity (MNE) through an acquisition. We argue that following the acquisition, those targets are tax-optimized in a profit shifting context if they are acquired by MNEs with...