DP2543 Why Pay More? Corporate Tax Avoidance Through Transfer Pricing in OECD Countries

Author(s):	Eric J Bartelsman, Roel Beetsma
Publication Date:	August 2000
Keyword(s):	Corporate Tax Rates, Profit Shifting, STAN Database, Transfer Pricing
JEL(s):	F20, H20
Programme Areas:	International Macroeconomics, Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=2543

This paper presents evidence of profit shifting in response to differences in corporate tax rates for a large selection of OECD countries. In our estimates we control for the effects of tax rate changes on real activity. Our baseline estimates suggest that, on average, a unilateral increase in the corporate tax rate does not lead to an increase in corporate tax revenues owing to a more than offsetting decline in reported profits.