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Why pay more? Corporate tax avoidance through transfer pricing in OECD countries

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  • Bartelsman, Eric J.
  • Beetsma, Roel M. W. J.

Abstract

This paper presents evidence of profit shifting in response to differences in corporate tax rates for a large selection of OECD countries. In our estimates we control for the effects of tax rate changes on real activity. Our baseline estimates suggest that, on average, a unilateral increase in the corporate tax rate does not lead to an increase in corporate tax revenues owing to a more than offsetting decline in reported profits.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 87 (2003)
Issue (Month): 9-10 (September)
Pages: 2225-2252

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Handle: RePEc:eee:pubeco:v:87:y:2003:i:9-10:p:2225-2252

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Web page: http://www.elsevier.com/locate/inca/505578

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  16. Hines, James R. Jr., 1999. "Lessons from Behavioral Responses to International Taxation," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 305-22, June.
  17. Grubert, Harry, 1998. "Taxes and the division of foreign operating income among royalties, interest, dividends and retained earnings," Journal of Public Economics, Elsevier, vol. 68(2), pages 269-290, May.
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