Profit Shifting and “Aggressive” Tax Planning by Multinational Firms: Issues and Options for Reform
By Clemens Fuest, C. Spengel, Katharina Finke, Jost H. Heckemeyer, H. Nusser. World Tax Journal, 2013
134 citations recorded by the source corpus.
This article discusses the issue of profit shifting and “aggressive” tax planning by multinational firms. The article makes two contributions. First, it provides some background information to the debate by giving a brief overview of existing empirical studies on profit shifting and by describing arrangements for IP-based profit shifting which are used by the companies currently accused of avoiding taxes. We then show that preventing this type of tax avoidance is, in principle, straightforward. Second, we argue that, in the short-term, policymakers should focus on extending withholding taxes in an internationally coordinated way. Other measures which are currently being discussed, in particular unilateral measures, like limitations on interest and license deduction, fundamental reforms of the international tax system and country-by-country reporting, are either economically harmful or need to be elaborated much further before their introduction can be considered.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/e7af5424ea8e36dcd3a60e485658e1f3b49cc7d0
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Citations in the corpus
- What Do We Know About Base Erosion and Profit Shifting? A Review of the Empirical Literature (2014, unknown): “In a recent discussion of the BEPS issue, Fuest et al. (2013) point to difficulties with extensions of residence taxation and instead argue for extending source-based taxation to reduce BEPS, in particular through withholding taxes.”
- Intellectual property box regimes: effective tax rates and tax policy considerations (2013, background): “Although the Code is only a political instrument as it is not binding, it has been successful in the sense that the EU Member States have withdrawn almost all tax regimes considered as harmful in the past 15 years (Fuest et al (2013)).”