IDEAS home Printed from
   My bibliography  Save this paper

Profit Shifting of Multinational Corporations Worldwide


  • Javier Garcia-Bernardo

    (Tax Justice Network, CORPTAX, Charles University in Prague)

  • Petr Jansky

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)


We exploit the new multinational corporations´ country-by-country reporting data with unparalleled country coverage to study profit shifting to tax havens. We show that a logarithmic function is preferable to linear and quadratic ones for modelling the extremely non-linear relationship between profits and tax rates. Using this methodology, we reveal that multinational corporations shifted US$1 trillion of profits in 2016 and that those headquartered in the United States and China did so most aggressively. We establish that the Cayman Islands is the largest tax haven, whereas countries with lower incomes tend to lose more tax revenue relative to total tax revenues.

Suggested Citation

  • Javier Garcia-Bernardo & Petr Jansky, 2021. "Profit Shifting of Multinational Corporations Worldwide," Working Papers IES 2021/14, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies.
  • Handle: RePEc:fau:wpaper:wp2021_14

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:


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

    Cited by:

    1. Niels Johannesen, 2022. "The Global Minimum Tax," CEBI working paper series 22-01, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    2. Alessandro Ferrari & Sébastien Laffitte & Mathieu Parenti & Farid Toubal, 2022. "Profit Shifting Frictions and the Geography of Multinational Activity," Working Papers ECARES 2022-33, ULB -- Universite Libre de Bruxelles.
    3. Alex Cobham & Tommaso Faccio & Javier Garcia‐Bernardo & Petr Janský & Jeffery Kadet & Sol Picciotto, 2022. "A Practical Proposal to end Corporate Tax Abuse: METR, a Minimum Effective Tax Rate for Multinationals," Global Policy, London School of Economics and Political Science, vol. 13(1), pages 18-33, February.
    4. Johannesen, Niels, 2022. "The global minimum tax," Journal of Public Economics, Elsevier, vol. 212(C).
    5. Javier Garcia-Bernardo & Petr Janský & Thomas Tørsløv, 2022. "Decomposing Multinational Corporations’ Declining Effective Tax Rates," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 70(2), pages 338-381, June.
    6. Katarzyna Bilicka & Evgeniya Dubinina & Petr Janský, 2022. "Fiscal consequences of corporate tax avoidance," WIDER Working Paper Series wp-2022-97, World Institute for Development Economic Research (UNU-WIDER).

    More about this item


    multinational corporation; corporate taxation; profit shifting; effective tax rate; country-by-country reporting; global development;
    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
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:fau:wpaper:wp2021_14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    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: Natalie Svarcova (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.