Business, Management and Accounting
2 years ago

Corporate tax avoidance leads to lower government revenues and higher indirect taxes.

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Working Paper Series
Fiscal consequences of corporate tax avoidance
Katarzyna Bilicka, Evgeniya Dubinina, Petr Jánský

Paper Summary

Multinational corporations avoid paying taxes by shifting profits to tax havens, causing governments to lose tax revenue. Countries with high profit shifting have lower corporate tax revenues and rates, relying more on personal and indirect taxes. Increasing municipal tax rates on corporate profits leads to a drop in tax revenue for areas with many aggressive multinational corporations.

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