Tax haven investments for Profit-Shifting: evidence from Spanish multinationals

Castillo-Murciego, Ángela; Laborda, Julio López

doi:10.1080/00036846.2022.2141464

Cited by 3 publications

(1 citation statement)

References 19 publications

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“…Specifically, there is evidence that MNEs artificially shift their profits to tax haven territories (Castillo-Murciego and López-Laborda, 2023;Tørsløv, Wier and Zucman, 2022), which are typically identified by their favourable tax conditions for foreign investors, among other characteristics (Dharmapala and Hines, 2009;Dharmapala, 2020 and2023); i.e., MNEs book profits in tax havens beyond what can be explained by their real activity in these territories (Castillo-Murciego and López-Laborda, 2023;Tørsløv, Wier and Zucman, 2022). Specifically, Alstadsaeter et al (2023) claims that about 35% of profits generated outside the home country of MNEs were shifted to tax havens in 2022.…”

Section: Introductionmentioning

confidence: 99%

Identifying Profit-Shifting to Tax Havens using statistics on Country-by-Country Reports

Castillo Murciego,

López Laborda

2024

REM

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Profit-Shifting is an aggressive tax planning activity that erodes public revenues worldwide. Using statistics based on recent Country-by-Country Reports, this article identifies both descriptively and econometrically the existence of such activity by large Spanish multinationals in EU tax havens. Moreover, the paper shows that the application of the minimum Effective Tax Rate of 15% to profits generated in other EU countries by these large multinationals, within the Two-Pillar solution of the OECD/G20 Inclusive Framework, could increase Spanish tax revenue by around 2- 17% of annual corporate income tax.

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Section: Introductionmentioning

confidence: 99%

Identifying Profit-Shifting to Tax Havens using statistics on Country-by-Country Reports

Castillo Murciego,

López Laborda

2024

REM

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Which multinationals can escape high Statutory Tax Rates? The Profit-Shifting strategy to reduce taxes

Castillo-Murciego

Laborda

2022

Applied Economics Letters

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Do (some of) the tax savings derived from Profit-Shifting go to increase the compensation of the board of directors?

Castillo-Murciego,

López-Laborda

2023

Preprint

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Taking a sample of listed non-financial Spanish companies between 2013 and 2018, this paper examines whether the artificial Profit-Shifting activity by multinationals to reduce taxes may increase the remuneration of the members of the board of directors. In addition to this main variable of interest related to Profit-Shifting, the analyses incorporate a variable that controls for companies being on the Ibex-35 stock market index, as an apparently chief determinant of the level of remuneration of directors. The results suggest that a remuneration premium exists derived from the joint effect of Profit-Shifting and being on the Ibex-35 stock market index, at least for executive directors. By economic sectors, extra remuneration coming from Profit-Shifting is found only for executive directors in energy and construction firms. Also, being on the Ibex-35 index has a positive effect on remuneration for both executive and non-executive directors in trade and services firms. The results by economic sector are seemingly correlated with the share of intangible assets by industry. JEL: F23; H25; H26; H87; M12

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Tax haven investments for Profit-Shifting: evidence from Spanish multinationals

Cited by 3 publications

References 19 publications

Identifying Profit-Shifting to Tax Havens using statistics on Country-by-Country Reports

Identifying Profit-Shifting to Tax Havens using statistics on Country-by-Country Reports

Which multinationals can escape high Statutory Tax Rates? The Profit-Shifting strategy to reduce taxes

Do (some of) the tax savings derived from Profit-Shifting go to increase the compensation of the board of directors?

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