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Real Responses of Intra-Firm Trade to the Large Corporate Tax Cut under the TCJA: Evidence from Japanese Customs Data

Author

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  • Makoto HASEGAWA
  • Takafumi SUZUKI

Abstract

Using Japanese customs data on export transactions from 2014 to 2021, we examine how intra-firm exports to the U.S. responded to the large corporate tax cut enacted under the Tax Cuts and Jobs Act of 2017 (TCJA). We observe exports at the firm-product-consignee-year level and identify whether the consignee is a U.S. subsidiary of the exporter. We find that related-party export prices did not decline relative to unrelated-party export prices following the TCJA, providing no evidence of a profit- shifting response through transfer pricing. In contrast, export quantities and values in related-party transactions increased in the post-TCJA period relative to those in unrelated-party transactions, with particularly strong responses for intermediate goods. These findings suggest that the response of intra-firm exports to the TCJA reflected real adjustment rather than profit-shifting incentives.

Suggested Citation

  • Makoto HASEGAWA & Takafumi SUZUKI, 2026. "Real Responses of Intra-Firm Trade to the Large Corporate Tax Cut under the TCJA: Evidence from Japanese Customs Data," Discussion papers e-26-001, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-26-001
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    Keywords

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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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