International profit shifting within multinationals: Giving new analysis with transfer pricing and geography and a lesson from the European experience

Date of Publication

2010

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Applied Economics

College

Ramon V. Del Rosario College of Business

Department/Unit

Economics

Thesis Adviser

Paulynne J. Castillo
Roberto B. Raymundo
Joel Q. Tanchuco

Abstract/Summary

Due to international tax differences in host countries, multinational firms shift profits and receive incentives for reallocation to reduce tax liabilities (Huizinga & Laeven, 2007). The Proximity-Concentration trade-off and the Gravity Model of Trade and Transportation are confirmed in this study through the established significance of the distance variable in inducing profit shifting. This paper shows as well that the profit shifting phenomenon is consistent in recent time periods and that multinationals shift toward a country that has recently decreased its corporate tax rate as supported by the finding in the Panel Data Analysis that inward shifting increased in 2001, 2005 and 2007 years wherein most of the European countries made significant decreases in the level of their corporate tax rates. It is found in this paper that countries have grown more elastic to shifting with the decrease in corporate tax rates.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU16058

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

117[1] leaves 29 cm.

Keywords

Tax shifting; Profit

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