EU banks and profit shifting: preliminary evidence from country-by-country reporting

This study examines the extent to which profits of the biggest and systemically relevant European multinational financial institutions react to differences in tax rates. We use new data made available through... [ view full abstract ]

This study examines the extent to which profits of the biggest and systemically relevant European multinational financial institutions react to differences in tax rates. We use new data made available through country-by-country reporting for the financial years 2014-2016. Results suggest the presence of profit shifting especially toward tax havens. In addition, tax havens with lower levels of regulatory quality and political stability, or a higher level of government effectiveness, attract relatively more profits.