Corporate tax elasticities: a reader's guide to empirical findings

Mooij, Ruud de; Ederveen, Sjef

doi:10.1093/oxrep/grn033

Cited by 184 publications

(113 citation statements)

References 28 publications

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“…More generally, costs of pro t shifting may be resource costs, such as hiring tax and transfer price experts to allocate e ciently accounting pro ts, or they can represent costs that the rm pays only if they are caught by the tax authorities. A consequence of this functional form is that the bigger the operation of an MNE in country 1, the cheaper it is to shift a given level of pro ts between the 3 See De Ederveen (2008 and2003) for a comprehensive overview of the empirical literature. 4 The theoretical model in this paper, and the general idea of this paper, builds on Chapter 3 from Mokkas (2009).…”

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confidence: 99%

Evidence for Profit Shifting with Tax-sensitive Capital Stocks

Mokkas¹

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper contributes to the literature providing indirect evidence for pro t shifting within multinational companies. In contrast to the previous studies we account for the tax responsiveness of the capital stock and analyse the impact of corporate taxes on both pre-and post-tax pro tability. Evidence from our large panel dataset of European subsidiaries supports the pro t shifting hypothesis. We nd that a 10 percentage point decrease in the tax rate increases post-tax pro tability by up to 1.1 percentage points. Further, our results suggest that nancial pro ts and losses are particularly responsive to taxes, which indicates that a large part of pro t shifting takes places via debt shifting. JEL classi cation: H25, H87 Terms of use: Documents in EconStor may

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confidence: 99%

Evidence for Profit Shifting with Tax-sensitive Capital Stocks

Mokkas¹

2015

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“…In an empirical study concerning the relationship between tax levels and investments, De Mooij and Ederveen [14] suggested that a ten percentage point in the reduction of a country's average real tax rate would increase that country's levels of FDI, and by over thirty percent on average and in the long run. To achieve this, the governments should increase the tax bracket in order to robe in more avenues for tax revenue.…”

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confidence: 99%

Implications of Tax Havens on Government Revenue

Karikari

2017

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Abstract:The contribution of government expenditure to the level of economic growth cannot be underestimated. Unfortunately, resources for the governmental expenditure, though limited, find their way out of the coffers. This paper tries to elaborate on the adverse effect of the existence of tax havens on government expenditure that seek to promote economic growth in developing countries. Literature indicates that high tax rates are a fundamental reason for the proliferation of government developmental funds-taxes, being syphoned to tax havens. Corrupt officials in government are also deemed to aid the intended government tax in reaching tax havens. In the end, international integration of tax bodies within governments and economies may lead to the strengthening of tax laws and downward review of tax rates can make tax obligations conducive and compelling, for economic growth.

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“…We set the parameter α such that, overall, CORTAX replicates a semi-elasticity of FDI to the EATR of −6, on average in the EU (this value varies according to the size of the multinational sector). It corresponds to the consensus estimate obtained in a recently updated meta analysis of de Mooij and Ederveen (2008).…”

Section: Multi-nationalsmentioning

confidence: 97%

An applied analysis of ACE and CBIT reforms in the EU

Mooij

Devereux

2010

Int Tax Public Finance

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We assess the quantitative impact of two reforms to corporation tax, which would eliminate the differential treatment of debt and equity: the allowance for corporate equity (ACE) and the comprehensive business income tax (CBIT). We explore the impact of these reforms on various decision margins, using an applied general equilibrium model for the EU calibrated with recent empirical estimates of elasticities. The results suggest that, if governments adjust statutory corporate tax rates to balance their budget, profit shifting and discrete location render CBIT more attractive for most individual European countries. European coordination makes a joint ACE more, and a joint CBIT less efficient. A combination of ACE and CBIT is always welfare improving.

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Corporate tax elasticities: a reader's guide to empirical findings

Cited by 184 publications

References 28 publications

Evidence for Profit Shifting with Tax-sensitive Capital Stocks

Evidence for Profit Shifting with Tax-sensitive Capital Stocks

Implications of Tax Havens on Government Revenue

An applied analysis of ACE and CBIT reforms in the EU

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