International tax planning within the structure of corporate entities owned by the shareholder‐individuals through Panama Papers destinations

Abstract

Motivation The Panama Papers scandal highlighted the scale of financial secrecy, anonymous ownership and shell companies and their role in profit shifting and tax avoidance. We show the importance of international tax planning within the structure of corporate entities owned by shareholder‐individuals through Panama Papers destinations. Purpose To identify profit‐shifting channels and to estimate related government revenue losses to European Union Member States. Methods Using company data from the Amadeus/Orbis database (Bureau Van Dijk, n.d.a, n.d.b), we applied micro‐data analysis to the financial statements of multinational companies (MNEs) owned by shareholder‐individuals. Two groups—one with and the other without links to Panama Papers tax havens—alongside an analysis of profit‐shifting indicators. Findings Profit is generally shifted by moving operating revenues or costs, though the use of debt channels is also important. Also, groups linked to tax havens pay significantly less tax per unit of profit before tax, and require less operating revenue to achieve higher profits. Finally, related government revenue losses were assessed at EUR 8.67 billion. Policy implication Our results are relevant to the European Commission’s Comprehensive Common Consolidated Corporate Tax Base (CCCCTB) as it aims to counter profit shifting out of the European Union (EU) into tax havens. Further, our research highlights the importance of setting up registries of ultimate beneficiary owners in EU Member States.

On using centrality to understand importance of entities in the Panama Papers

“…In a law review, [6] study the disclosures surrounding the leaked documents and provide a discussion on the impact of bribery on the global community, as well as tax evasion. Numerous other references cover similar issues, often spanning disciplines: a selected few include [7,[9][10][11]. Computational studies of any kind have not been common; [12] is one rare example of a work that uses the network to study the financial networks of the Middle East, but the scope and analysis is both geopolitically and structurally limited.…”

Multinacionalidade, ativos intangíveis e agressividade fiscal

“…A agressividade fiscal é uma característica presente em grandes empresas que buscam estratégias para redução da carga tributária, ela ocorre por meio da alocação da tributação entre os membros de um grupo econômico, localizados em diferentes jurisdições, que manipula ou controla de forma intencional os preços praticados intragrupo para reduzir a renda tributável (Chen et al, 2010;Blouin, 2012;Taylor & Richardson, 2015;Silva & Martinez, 2016;Schanz et al, 2017;Lawless et al, 2018;Ramos & Martinez, 2018;Pieretti & Pulina, 2020;Johannesen et al, 2020;Oguttu & Kayis-Kumar , 2020;Choi et al, 2020;Goyvaerts & Roggeman, 2020;Mardan & Stimmelmayr, 2020;Merlo et al, 2020;Nerudova et al, 2020;Akhtar et al, 2019).…”

“…Os dois temas discutidos na literatura contábil internacional são a agressividade tributária e a multinacionalidade das empresas, isso porque há indícios de que a tributação influencia efetivamente nos negócios, principalmente, quando há alteração da localização das empresas que visam a redução dos tributos (Blouin, 2012;Silva & Martinez, 2016;Schanz, Dinkel & Keller, 2017;Lawless, McCoy, Morgenroth & O"Toole, 2018;Ramos & Martinez, 2018;Pieretti & Pulina, 2020;Johannesen, Torslov, & Wier, 2020;Oguttu & Kayis-Kumar, 2020;Choi, Furusawa & Ishikawa, 2020;Goyvaerts & Roggeman, 2020;Mardan & Stimmelmayr, 2020, Merlo, Riedel & Wamser, 2020Nerudova, Solilova, Litzman & Janský, 2020;Akhtar, Akhtar, John & Wong, 2019).…”

“…Ao explorar os caminhos tomados pelos empresários para mitigar custos tributários, Nerudova et al (2020) se propuseram a identificar os canais de transferência de lucros. Eles concluíram que os lucros das empresas analisadas geralmente são deslocados pela movimentação das receitas, dos custos operacionais e do uso de canais de dívida.…”

“…Ressalta-se a ausência de trabalhos anteriores que investiguem esta temática. No cenário internacional não existem trabalhos que investigam o contexto explorado nesta pesquisa, mas existem estudos que relacionam a multinacionalidade aos preços de transferência (Blouin, 2012;Silva & Martinez, 2016;Schanz et al, 2017, Lawless et al, 2018Ramos & Martinez, 2018;Pieretti &Pulina, 2020;Johannesen et al, 2020;Oguttu & Kayis-Kumar, 2020;Choi et al, 2020;Goyvaerts & Roggeman, 2020;Mardan & Stimmelmayr, 2020;Merlo et al, 2020;Nerudova et al 2020;Akhtar et al, 2019). Além disso, há também estudos que relacionam a multinacionalidade e ativos intangíveis aos preços de transferência (Taylor & Richardson, 2015, Barrios & D'Andria, 2020.…”