IDEAS home Printed from https://ideas.repec.org/a/bla/devpol/v33y2015i3p271-292.html
   My bibliography  Save this article

International Profit-Shifting out of Developing Countries and the Role of Tax Havens

Author

Listed:
  • Petr Janský
  • Alex Prats

Abstract

type="main" xml:id="dpr12113-abs-0001"> This article contributes to the debate on how tax avoidance and evasion can hamper development efforts by investigating the link between profit-shifting out of developing countries and tax havens. Analysis of more than 1500 multinational corporations (MNCs) operating in India shows that in 2010 those MNCs with links to tax havens reported lower profits and paid less in taxes per unit of asset than MNCs with no such links. This confirms the notion that when corporations have links to tax havens they enjoy higher incentives, because of the low tax rates, and opportunities to shift income because of the secrecy provisions tax havens offer.

Suggested Citation

  • Petr Janský & Alex Prats, 2015. "International Profit-Shifting out of Developing Countries and the Role of Tax Havens," Development Policy Review, Overseas Development Institute, vol. 33(3), pages 271-292, May.
    • Handle: RePEc:bla:devpol:v:33:y:2015:i:3:p:271-292
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/dpr.2015.33.issue-3
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Petr Janský, 2015. "Indicators of Taxation of Multinational Enterprises in the Czech Republic [Ukazatele zdanění mezinárodních společností v České republice]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2015(4), pages 24-38.
    2. Petr Janský, 2023. "Corporate Effective Tax Rates for Research and Policy," Public Finance Review, , vol. 51(2), pages 171-205, March.
    3. Ananyev, Maxim, 2022. "Political economy of cross-border income shifting: A protection racket approach," Journal of Comparative Economics, Elsevier, vol. 50(4), pages 1087-1102.
    4. Vít Jedlička, 2017. "International Tax Planning: Current State of Knowledge," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(4), pages 31-46.
    5. Kodjo Adandohoin & Jean-Francois Brun, 2021. "The Role of Income and Property Taxes in Tax Transition and the Mediating Effect of Financial Development," Post-Print hal-03470540, HAL.
    6. Danuse Nerudova & Veronika Solilova & Marek Litzman & Petr Janský, 2020. "International tax planning within the structure of corporate entities owned by the shareholder‐individuals through Panama Papers destinations," Development Policy Review, Overseas Development Institute, vol. 38(1), pages 124-139, January.
    7. Kodjo Adandohoin & Jean-Francois Brun, 2020. "Are incomes and property taxes effective instruments for tax transition?," CERDI Working papers hal-03053683, HAL.
    8. Caroline Schimanski, 2018. "Do multinational companies shift profits out of developing countries?: How data availability may hide the evidence," WIDER Working Paper Series wp-2018-52, World Institute for Development Economic Research (UNU-WIDER).
    9. Maxim Ananyev, 2019. "Political Economy of Cross-Border Income Shifting: A Protection Racket Approach," Melbourne Institute Working Paper Series wp2019n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    10. Karel Brychta & Aleksandra Sulik-Górecka, 2019. "Legal Regulation for Advance Pricing Agreements in the Czech Republic and Poland - a Comparative Case Study," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(1), pages 209-224.
    11. Dobranschi, Marian & Nerudová, Danuše & Solilová, Veronika & Litzman, Marek, 2023. "An alternative measure of profit shifting and corporate income tax losses," Journal of Multinational Financial Management, Elsevier, vol. 70.
    12. Hodula, Martin, 2023. "Fintech credit, big tech credit and income inequality," Finance Research Letters, Elsevier, vol. 51(C).
    13. Kirsten Martinus & Thomas Sigler & Iacopo Iacopini & Ben Derudder, 2019. "The role of tax havens and offshore financial centers in Asia-Pacific networks: evidence from firm-subsidiary connections," Asian Business & Management, Palgrave Macmillan, vol. 18(5), pages 389-411, November.
    14. Driffield, Nigel & Jones, Chris & Kim, Jae-Yeon & Temouri, Yama, 2021. "FDI motives and the use of tax havens: Evidence from South Korea," Journal of Business Research, Elsevier, vol. 135(C), pages 644-662.
    15. Kodjo Adandohoin & Jean-Francois Brun, 2020. "Are incomes and property taxes effective instruments for tax transition?," Working Papers hal-03053683, HAL.
    16. Samer Khouri & Lubos Elexa & Michal Istok & Andrea Rosova, 2019. "A Study from Slovakia on the Transfer of Slovak Companies to Tax Havens and Their Impact on the Sustainability of the Status of a Business Entity," Sustainability, MDPI, vol. 11(10), pages 1-18, May.
    17. Abdullah Almutairi & Baban Eulaiwi & Robert Evans & Grantley Taylor, 2023. "Tax Haven Use and Related‐Party Transactions: Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 33(4), pages 352-374, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:devpol:v:33:y:2015:i:3:p:271-292. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/odioruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.