Does tax enforcement disparately affect domestic versus multinational corporations around the world?

• 成果类型: Article
• 署名作者: De Simone, Lisa; Stomberg, Bridget; Williams, Brian
• 署名单位: University of Texas System; University of Texas Austin; Indiana University System; Indiana University Bloomington; IU Kelley School of Business; Texas A&M University System; Texas A&M University College Station; Mays Business School
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12900
• 发表日期: 2023
• 页码: 2816-2845
• 关键词: IMPLIED COST; time-series; INFORMATION; prediction; winners; return

摘要

Global tax enforcement policies have received increased attention since the financial crisis, with much stated focus on curbing perceived harmful tax practices of multinational corporations. Yet there is a dearth of evidence on possible differential effects of home-country tax enforcement on multinationals. We take a step toward filling this void in the tax policy discussion by examining whether there is a differential relation between changes in home-country enforcement and the tax avoidance of domestic versus multinational corporations. Using OECD data on 50 countries from 2005 to 2019, we find increases in home-country enforcement are associated with lower levels of tax avoidance for domestic firms than for multinational corporations. Using a subset of firms from the Bureau van Dijk database, we find that multinationals avoid more tax in foreign countries when home-country enforcement increases. Results are stronger for multinationals with a higher proportion of subsidiaries in low-tax countries and when enforcement spending is low. These findings have implications for policy-makers and highlight the importance of coordinated enforcement efforts across jurisdictions-such as the recently proposed global minimum tax-to successfully curb multinationals' worldwide tax avoidance.