Arbeitspapier
Shifting-Profits through Tax Loopholes. Evidence from Ecuador
Based on a natural experiment that took place in Ecuador in the context of a capital outflow tax, this paper presents suggestive evidence of the emergence of an abnormal transfer pricing behavior. We exploit the fact that some imports were eligible to a tax-credit measure aiming to offset the capital outflow tax. The identification strategy relies on the fact that a foreign multinational enterprise has only an incentive to increase the unit value -transfer price- for profit shifting motivations of products eligible to the tax-credit. Then, comparing the evolution of the unit value of eligible products (the treatment group) with that of non eligible products (the comparison group) before and after the tax-credit measure, we estimate the over-reporting incentive's impact on the reported value. Results show that the declared unit value of eligible imports increased following the introduction of the tax-credit measure. Various tests suggest that this abnormal increase is attributable to a profit-shifting behavior.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 6240
- Klassifikation
-
Wirtschaft
Trade Policy; International Trade Organizations
Business Taxes and Subsidies including sales and value-added (VAT)
Tax Evasion and Avoidance
Fiscal Policies and Behavior of Economic Agents: Firm
Illegal Behavior and the Enforcement of Law
- Thema
-
profit-shifting
tax evasion
transfer pricing
tax loophole
capital outflow tax
customs reform
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Chalendard, Cyril
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Chalendard, Cyril
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2016
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