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Tackling BEPS in the Global South: Evidence from Peru’s tax reform

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  • Toledo, Katia
  • Alvarado, Alfredo

Abstract

This study assesses the effect of a transfer pricing reform on tax payments at the firm level. Given the critical role that the consulting firms play in tax avoidance schemes, we include the effect of expenditure on tax advisory. Exploiting the reform’s particular features, we use a regression discontinuity design to estimate the causal effect of the tax reform. We find that firms affected by the intervention on average paid more taxes in 2017. Although we do not find effects for 2018, we find no conclusive evidence that spending on tax advisory drove such an effect.

Suggested Citation

  • Toledo, Katia & Alvarado, Alfredo, 2023. "Tackling BEPS in the Global South: Evidence from Peru’s tax reform," Economic Systems, Elsevier, vol. 47(3).
    • Handle: RePEc:eee:ecosys:v:47:y:2023:i:3:s0939362523000560
    DOI: 10.1016/j.ecosys.2023.101122
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    More about this item

    Keywords

    Regression discontinuity design; Base erosion; Profit shifting; Transfer pricing; Developing countries; Peru;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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