"Tax Avoidance and the Complexity of Multinational Enterprises,"
CEPII Working Paper 2023- 04 , February 2023 , CEPII.
Does the complexity of the ownership structure of multinational enterprises' (MNEs) serve tax avoidance? We use firm-level cross-country data to show that affiliates belonging to more complex MNEs are more likely to bunch around zero profit, which is consistent with complexity enabling tax avoidance by multinationals. Our results show that only the more complex MNEs shift profits away from their high-tax affiliates, while MNEs with flat ownership structures do not display such pattern.
Complexity ; Firm organization ; Multinational enterprises ; Profit shifting ; Tax avoidance