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.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 6240
- Classification
-
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
- Subject
-
profit-shifting
tax evasion
transfer pricing
tax loophole
capital outflow tax
customs reform
- Event
-
Geistige Schöpfung
- (who)
-
Chalendard, Cyril
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2016
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Chalendard, Cyril
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2016
Other Objects (12)
Asymmetric Capital Tax Competition with Profit Shifting
Do Corporate Tax Cuts Reduce International Profit Shifting?
Royalty Taxation under Tax Competition and Profit Shifting
Do corporate tax cuts reduce international profit shifting
Do Corporate Tax Cuts Reduce International Profit Shifting?
Royalty Taxation under Tax Competition and Profit Shifting
Heterogeneous Firms, "Profit Shifting" FDI and International Tax Competition
Evidence for profit shifting with tax sensitive capital stocks
Corporate tax reforms and tax-motivated profit shifting : evidence from the EU
Multinationals’ Profit Response to Tax Differentials: Effect Size and Shifting Channels
The Corporate Tax Haven Index: A new geography of profit shifting
Multinationals' profit response to tax differentials: Effect size and shifting channels
Asymmetric Capital Tax Competition with Profit Shifting
Do Corporate Tax Cuts Reduce International Profit Shifting?
Royalty Taxation under Tax Competition and Profit Shifting
Do corporate tax cuts reduce international profit shifting
Do Corporate Tax Cuts Reduce International Profit Shifting?
Royalty Taxation under Tax Competition and Profit Shifting
Heterogeneous Firms, "Profit Shifting" FDI and International Tax Competition
Evidence for profit shifting with tax sensitive capital stocks
Corporate tax reforms and tax-motivated profit shifting : evidence from the EU
Multinationals’ Profit Response to Tax Differentials: Effect Size and Shifting Channels
The Corporate Tax Haven Index: A new geography of profit shifting
Multinationals' profit response to tax differentials: Effect size and shifting channels
Asymmetric Capital Tax Competition with Profit Shifting
Do Corporate Tax Cuts Reduce International Profit Shifting?
Royalty Taxation under Tax Competition and Profit Shifting
Do corporate tax cuts reduce international profit shifting
Do Corporate Tax Cuts Reduce International Profit Shifting?
Royalty Taxation under Tax Competition and Profit Shifting
Heterogeneous Firms, "Profit Shifting" FDI and International Tax Competition
Evidence for profit shifting with tax sensitive capital stocks
Corporate tax reforms and tax-motivated profit shifting : evidence from the EU
Multinationals’ Profit Response to Tax Differentials: Effect Size and Shifting Channels
The Corporate Tax Haven Index: A new geography of profit shifting