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Global Profit Shifting, 1975 – 2019

Author

Listed:
  • Ludvig Wier

    (Ministry of finance Denmark)

  • Gabriel Zucman

    (EU Tax - EU Tax Observatory, UC Berkeley - University of California [Berkeley] - UC - University of California)

Abstract

This paper constructs time series of global profit shifting covering the 2015–19 period, during which major international efforts were implemented to curb profit shifting. We find that (i) multinational profits grew faster than global profits, (ii) the share of multinational profits booked in tax havens remained constant at around 37 per cent, and (iii) the fraction of global corporate tax revenue lost due to profit shifting rose from 9 to 10 per cent. We extend our time series back to 1975 and document a remarkable increase of multinational profits and global profit shifting from 1975 to 2019.

Suggested Citation

  • Ludvig Wier & Gabriel Zucman, 2022. "Global Profit Shifting, 1975 – 2019," Working Papers halshs-04103666, HAL.
    • Handle: RePEc:hal:wpaper:halshs-04103666
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04103666
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    References listed on IDEAS

    as
    1. V. Vicard, 2015. "Profit shifting through transfer pricing: evidence from French firm level trade data," Working papers 555, Banque de France.
    2. Ernesto Crivelli & Ruud De Mooij & Michael Keen, 2016. "Base Erosion, Profit Shifting and Developing Countries," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 72(3), pages 268-301, September.
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    Cited by:

    1. Alessandro Ferrari & Sébastien Laffitte & Mathieu Parenti & Farid Toubal, 2022. "Profit Shifting Frictions and the Geography of Multinational Activity," Working Papers halshs-04103710, HAL.
    2. Andre Sanchez Pacheco, 2023. "Consolidated Foreign Wealth of Nations: Nationality-based measures of international exposure," Trinity Economics Papers tep0623, Trinity College Dublin, Department of Economics.
    3. Manon François & Carlos Oliveira & Bluebery Planterose & Gabriel Zucman, 2022. "A Modern Excess Profit Tax," Post-Print halshs-04103941, HAL.
    4. Amendolagine, Vito & Bruno, Randolph Luca & Cipollina, Maria & De Pascale, Gianluigi, 2023. "Minimum Global Tax: Winners and Losers in the Race for Mergers and Acquisitions," IZA Discussion Papers 16144, Institute of Labor Economics (IZA).
    5. Marius Brülhart & Marko Koethenbuerger & Matthias Krapf & Raphaël Parchet & Kurt Schmidheiny & David Staubli, 2023. "Competition, Harmonization and Redistribution: Corporate Taxes in Switzerland," NBER Chapters, in: Policy Responses to Tax Competition, National Bureau of Economic Research, Inc.
    6. Christine L. Dobridge & Patrick Kennedy & Paul Landefeld & Jacob Mortenson, 2023. "The TCJA and Domestic Corporate Tax Rates," Finance and Economics Discussion Series 2023-078, Board of Governors of the Federal Reserve System (U.S.).
    7. Andreas HAUFLER & KATO Hayato, 2024. "A Global Minimum Tax for Large Firms Only: Implications for Tax Competition," Discussion papers 24051, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    profit shifting; factor shares; taxation;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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