Aggressive Tax Avoiders: US Multinationals Shifting Domestic Earnings to Zero

• 成果类型: Article
• 署名作者: Chen, Novia X.; Lehmer, Tiana
• 署名单位: University of Houston System; University of Houston; University of California System; University of California Irvine
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0419
• 发表日期: 2021
• 页码: 181-206
• 关键词: foreign multinationals; financial constraints; avoidance evidence; income; corporations; incentives; COSTS; FIRMS; TRANSPARENCY; valuation

摘要

We investigate whether U.S. multinational corporations shift income overseas to the point of recording domestic pretax earnings around zero. We label firms with near-zero domestic earnings Small'' firms, and present evidence that Small captures targeted income shifting that minimizes worldwide and domestic current taxes. Because shifting essentially all income out of the U.S. represents a very aggressive form of international tax planning, Small firms represent an important margin for understanding the income shifting of U.S. MNCs. We find that firms facing tax incentives to shift income and firms with greater income shifting ability are more likely to report near-zero domestic earnings. In addition, investors value the earnings of Small firms higher than that of other U.S. multinational firms, conditional on overall profitability, suggesting that, on average, investors hold a positive view of income shifting to the point of recording domestic earnings around zero.