Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2026-06-03
Number: 26-027/VI
Author-Name: Ruby Doeleman
Author-Workplace-Name: WU Vienna
Author-Name: Dominika Langenmayr
Author-Workplace-Name: KU Eichstätt-Ingolstadt
Author-Name: Dirk Schindler
Author-Workplace-Name: Erasmus University Rotterdam
Title: Could Country-by-Country Reporting Increase Profit Shifting?
Abstract: Since 2016, Country-by-Country reporting has provided tax authorities with detailed information about multinationals' worldwide activities. We model Country-by-Country reporting as increasing tax planning and tax audit costs for profit-shifting multinationals, where the latter costs depend on the share of profits in tax havens. Then, Country-by-Country reporting makes shifting profits from a high-tax country to a tax haven more attractive compared to shifting from a low-tax country. Thus, while total profits shifted to the haven decrease, profit shifting from high-tax affiliates may increase relative to the situation without Country-by-Country reporting. We confirm these changes in profit-shifting patterns using a difference-in-differences design.
Classification-JEL: F23, H25, H26
Keywords: Country-by-Country-Reporting, Profit Shifting, Anti-Tax-Avoidance Rules
File-URL: https://papers.tinbergen.nl/26027.pdf
File-Format: application/pdf
File-Size: 3.039.758 bytes
Handle: RePEc:tin:wpaper:20260027