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Tax Planning and Multinational Behavior

Author

Listed:
  • Rosanne Altshuler
  • Lysle Boller
  • Kevin A. Roberts
  • Juan Carlos Suárez Serrato

Abstract

We use newly linked IRS data to study how US multinationals use tax-planning structures that exploit mismatches between US and foreign tax laws. In 2016, these structures accounted for 36% of foreign profits despite being adopted by only 18% of firms. We develop and estimate a structural model using adoption patterns and changes in foreign effective tax rates, domestic and foreign investment, and global R&D following adoption. The model implies substantial heterogeneity in adoption costs and benefits and shows that restricting tax planning creates tradeoffs between tax revenue and economic activity that are amplified by global R&D linkages.

Suggested Citation

  • Rosanne Altshuler & Lysle Boller & Kevin A. Roberts & Juan Carlos Suárez Serrato, 2026. "Tax Planning and Multinational Behavior," NBER Working Papers 35874, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35874
    Note: PE
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • 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

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