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Effects of corporate transparency on tax avoidance: evidence from country-by-country reporting

Author

Listed:
  • Tijmen Tuinsma

    (Katholieke Universiteit Leuven)

  • Kristof Witte

    (Katholieke Universiteit Leuven
    Maastricht University)

  • Petr Janský

    (Charles University)

  • Miroslav Palanský

    (Charles University
    Tax Justice Network)

  • Vitezslav Titl

    (Katholieke Universiteit Leuven
    Utrecht University
    CESIfo Network)

Abstract

Since 2016, multinationals with a revenue over € 750 million have to submit country-by-country reports to tax authorities to deter tax avoidance. Using a regression discontinuity design, we provide evidence for an increase in affected multinationals’ effective tax rates. However, the most aggressive multinationals with known tax haven presence were only moderately affected. The effect is mainly driven by medium-aggressive firms, which achieved low effective tax rates without tax haven affiliates to shift profits to. The policy was thus effective in combating some tax avoidance but profit shifting to tax havens remains an issue, explaining the push for further policy measures including the global minimum corporate tax rate.

Suggested Citation

  • Tijmen Tuinsma & Kristof Witte & Petr Janský & Miroslav Palanský & Vitezslav Titl, 2025. "Effects of corporate transparency on tax avoidance: evidence from country-by-country reporting," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 32(5), pages 1366-1398, October.
    • Handle: RePEc:kap:itaxpf:v:32:y:2025:i:5:d:10.1007_s10797-025-09885-w
    DOI: 10.1007/s10797-025-09885-w
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    Keywords

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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