Peter Egger, Nora Strecker, Benedikt Zoller-Rydzek, 24 September 2018

The OECD estimates that more than $100 billon is lost each year to tax avoidance by MNEs. One way that firms do this is by using their size and mobility to bargain for tax breaks. This column uses French data to identify the nature of such bargaining. It finds that the scale of the projected tax payment accounts for 41% of the tax break, and a credible threat to relocate accounts for the rest.

Peter Egger, Georg Wamser, 07 October 2015

Controlled foreign company rules are implemented by countries to prevent adverse profit-shifting activities by multinationals. This column suggests there are unintended consequences of such rules for real investment activity. Using the case of German legislation, the authors find that fixed assets at foreign subsidiaries decline by about €7 million per subsidiary in response to controlled foreign company treatment.

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