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Global Profit Shifting of Multinational Companies: Evidence from Country-by-Country Reporting Micro Data

Author

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  • Clemens Fuestifo
  • Stefan Greil
  • Felix Huggerifo
  • Florian Neumeierifo

Abstract

We use micro data from country-by-country reports of more than 3,600 multinational companies to analyze global profit shifting to avoid taxes. Unlike other data sets, country-by-country reports provide detailed information about the global economic activities of multinational companies, including those in tax haven countries. We find that these companies reduce their tax burden by €39 billion per year by shifting profits to low-tax countries. Extrapolating our results to the universe of large multinational enterprises indicates a global loss in corporate tax revenues of €162 billion per year (12% of their overall tax payments). We show that taking into account non-linearities in profit shifting and subsidiaries reporting zero profits is key for accurately estimating profit shifting.

Suggested Citation

  • Clemens Fuestifo & Stefan Greil & Felix Huggerifo & Florian Neumeierifo, 2025. "Global Profit Shifting of Multinational Companies: Evidence from Country-by-Country Reporting Micro Data," Journal of the European Economic Association, European Economic Association, vol. 23(5), pages 1773-1808.
    • Handle: RePEc:oup:jeurec:v:23:y:2025:i:5:p:1773-1808.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvaf007
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    Cited by:

    1. Bilicka, Katarzyna & Dubinina, Evgeniya & Janský, Petr, 2026. "Fiscal consequences of corporate tax avoidance," Journal of Public Economics, Elsevier, vol. 257(C).
    2. Alice Chiocchetti & Ninon Moreau-Kastler, 2026. "The Global Allocation of Extractive Windfalls," Working Papers 044, EU Tax Observatory.
    3. Lorenzo Garlanda-Longueville & Mathias Lé & Kevin Parra Ramirez, 2025. "Why Do Banks Have So Much Debt In Tax Havens?," EconomiX Working Papers 2025-43, University of Paris Nanterre, EconomiX.

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