American Economic Review Vol. 109 No. 8 2019
Comparing UK Tax Returns of Foreign Multinationals to Matched Domestic Firms
Abstract
In this paper, I use confidential UK corporate tax returns data to explore whether there are systematic differences in the amount of taxable profits that multinational and domestic companies report. I find that the ratio of taxable profits to total assets reported by foreign multinational subsidiaries is one-half that of comparable domestic standalones. The majority of the difference is attributable to the fact that a higher proportion of foreign multinational subsidiaries report zero taxable profits. I document how the estimated difference is related to profit shifting and show that using accounting data leads to much smaller estimates of the difference.
- DOI
- 10.1257/aer.20180496
- Volume
- 109
- Issue
- 8
- Pages
- 2921-2953
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref