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

22 Pages Posted: 7 Feb 2001

See all articles by Eric J. Bartelsman

Eric J. Bartelsman

Vrije Universiteit Amsterdam; Tinbergen Institute; IZA Institute of Labor Economics

Roel M. W. J. Beetsma

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); European Commission; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute; Netspar

Date Written: August 2000

Abstract

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.

Keywords: Profit shifting, transfer pricing, corporate tax rates, STAN database

JEL Classification: F2, H2

Suggested Citation

Bartelsman, Eric J. and Beetsma, Roel M. W. J., Why Pay More? Corporate Tax Avoidance Through Transfer Pricing in OECD Countries (August 2000). Available at SSRN: https://ssrn.com/abstract=258937

Eric J. Bartelsman

Vrije Universiteit Amsterdam ( email )

Amsterdam, ND North Holland
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+31 (0)20 44 46044 (Phone)

Tinbergen Institute ( email )

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IZA Institute of Labor Economics

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Roel M. W. J. Beetsma (Contact Author)

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

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European Commission ( email )

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Centre for Economic Policy Research (CEPR)

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Tinbergen Institute ( email )

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Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
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