IDEAS home Printed from https://ideas.repec.org/a/mhr/finarc/urndoi10.1628-fa-2019-0011.html
   My bibliography  Save this article

Tax Avoidance through Advance Tax Rulings - Evidence from the LuxLeaks Firms

Author

Listed:
  • Birgit Huesecken
  • Michael Overesch

Abstract

Our empirical study tests the effect of special tax deals on tax avoidance by multinational corporations. In 2014, the International Consortium of Investigative Journalists published confidential documents identifying hundreds of firms worldwide that had benefited from advance tax rulings. We find that after engaging in an advance tax ruling in the tax haven Luxembourg, firms have lower worldwide effective tax rates than nonruling firms. The results are robust even if we mitigate a potential bias via propensity-score matching. Consequently, this study gives evidence for corporate tax avoidance through special tax deals in the form of advance tax rulings.

Suggested Citation

  • Birgit Huesecken & Michael Overesch, 2019. "Tax Avoidance through Advance Tax Rulings - Evidence from the LuxLeaks Firms," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 75(4), pages 380-412.
    • Handle: RePEc:mhr:finarc:urn:doi:10.1628/fa-2019-0011
    DOI: 10.1628/fa-2019-0011
    as

    Download full text from publisher

    File URL: https://www.mohrsiebeck.com/en/article/tax-avoidance-through-advance-tax-rulings---evidence-from-the-luxleaks-firms-101628fa-2019-0011
    Download Restriction: Fulltext access is included for subscribers to the printed version.
    File URL: https://libkey.io/10.1628/fa-2019-0011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Egger, Peter H. & Strecker, Nora M. & Zoller-Rydzek, Benedikt, 2020. "Estimating bargaining-related tax advantages of multinational firms," Journal of International Economics, Elsevier, vol. 122(C).
    2. Petr Janský, 2023. "Corporate Effective Tax Rates for Research and Policy," Public Finance Review, , vol. 51(2), pages 171-205, March.

    More about this item

    Keywords

    advance tax ruling; corporate taxation; tax competition; tax avoidance;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:doi:10.1628/fa-2019-0011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Wolpert (email available below). General contact details of provider: https://www.mohrsiebeck.com/fa .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.