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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

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.

Suggested Citation

  • Bartelsman, Eric J & Beetsma, Roel, 2000. "Why Pay More? Corporate Tax Avoidance Through Transfer Pricing in OECD Countries," CEPR Discussion Papers 2543, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2543
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    References listed on IDEAS

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    1. Kashif S. Mansori & Alfons J. Weichenrieder, 2001. "Tax Competition and Transfer Pricing Disputes," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(1), pages 1-1, December.
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    6. Hines, James R. Jr., 1999. "Lessons From Behavioral Responses to International Taxation," National Tax Journal, National Tax Association, vol. 52(2), pages 305-322, June.
    7. Grubert, Harry & Mutti, John, 1991. "Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision Making," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 285-293, May.
    8. 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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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Corporate Tax Rates; Profit Shifting; STAN Database; Transfer Pricing;

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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