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Estimating the Costs of International Corporate Tax Avoidance: The Case of the Czech Republic

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  • Petr Jansky

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

Abstract

International corporate tax avoidance by multinational enterprises likely lowers the Czech Republic's corporate income tax revenue, but it is not clear by how much. To clarify this I first review existing estimates of the costs of international corporate tax avoidance to government revenue worldwide. I then discuss research and revenue estimates relevant for the Czech Republic and develop a few new ones, albeit only illustrative. None of the existing research focused on the Czech Republic nor the five recent international studies I examine provide reliable estimates for the Czech Republic. The extrapolations from these studies result into a range from 6 to 57 billion CZK (4-38 % of current corporate income tax revenue) with a median of 15 billion CZK (10 %) in annual corporate income tax revenue loss. This scale is comparable with the responses of 35 Czech experts with a median of 20 billion CZK (13 %). I conclude with a discussion of these rough estimates as well as questions for further research and policy recommendations.

Suggested Citation

  • Petr Jansky, 2016. "Estimating the Costs of International Corporate Tax Avoidance: The Case of the Czech Republic," Working Papers IES 2016/21, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Nov 2016.
    • Handle: RePEc:fau:wpaper:wp2016_21
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    File URL: http://ies.fsv.cuni.cz/sci/publication/show/id/5529/lang/cs
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    More about this item

    Keywords

    corporate income tax; international taxation; tax avoidance; BEPS; Czech Republic;
    All these keywords.

    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
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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