Evaluation of tax gap: the scale of international

Evaluation of tax gap: the scale ofinternational corporate tax avoidance

Petr Jansky

Charles University, Prague, Czechia

European Parliament, TAX3 Committee, 24 January 2019

Introduction Tax havens Conclusion

Tax gap

I Tax avoidance, tax evasion, tax fraudI Multinational enterprises, other firms, individualsI What is the scale of corporate tax gap due to tax havens?

Petr Jansky Tax gap 2 / 5


Corporate tax gap due to tax havens

Reference USD bn Data Country-level

Johansson et al. (2017), OECD 100-240 Orbis NoJansky & Palansky (2018) 125+ FDI YesCobham & Jansky (2017) 133+ FDI YesIMF (2014) 180 National accounts YesUNCTAD (2015) 200 FDI NoTørsløv, Wier, & Zucman (2018) 230 Combination YesClausing (2016) 280+ FDI YesCobham & Jansky (2018) 500 Revenue YesIMF’s Crivelli et al. (2016) 600 Revenue No

Source: Cobham and Jansky (forthcoming)



Corporate tax gap due to tax havens,overall estimates by income group

Source: Jansky and Palansky (2018)



Conclusion

I Better data can improve the estimation of tax gapI Promising country-by-country reporting dataI The tax gap can be reduced


Petr [email protected]


References I

I Clausing, K. A. (2016). The Effect of Profit Shifting on the Corporate Tax Base in the United States andBeyond. National Tax Journal, 69(4), 905–934.

I Cobham, A., Jansky, P. (2017). Global distribution of revenue loss from tax avoidance: Re-estimation andcountry results (UNU-WIDER Working Paper No. 55) (pp. 1–28). Helsinki: UNU-WIDER.

I Cobham, A., Jansky, P. (2018). Global distribution of revenue loss from corporate tax avoidance:re-estimation and country results. Journal of International Development, 30(2), 206–232.https://doi.org/10.1002/jid.3348

I Cobham, A., Jansky, P. (forthcoming). Estimating illicit financial flows: A critical guide to the data,methodologies and findings. Retrieved fromhttps://tax-justice-network.gitbooks.io/our-book-project/content/).

I Cobham, A., Jansky, P. (2019). Measuring Misalignment: The Location of US Multinationals’ EconomicActivity versus the Location of their Profits. Development Policy Review, 1–38.https://doi.org/10.1111/dpr.12315

I Garcia-Bernardo, J., Jansky, P., Tørsløv, T. (forthcoming). Taxation of multinational enterprises: Do wehave a level playing field? Mimeo.


References II

I Crivelli, E., de Mooij, R., Keen, M. (2016). Base Erosion, Profit Shifting and Developing Countries.FinanzArchiv: Public Finance Analysis, 72(3), 268–301.https://doi.org/10.1628/001522116X14646834385460

I Jansky, P. (2019). Effective tax rates for multination entreprises in the EU (Policy paper for Greens/EFAgroup in the European Parliament.) (pp. 1–41).

I Jansky, P., Palansky, M. (2018). Estimating the Scale of Profit Shifting and Tax Revenue Losses Relatedto Foreign Direct Investment. WIDER Working Paper, 2018(21).

I Johansson, A., Skeie, O. B., Sorbe, S., Menon, C. (2017). Tax planning by multinational firms: Firm-levelevidence from a cross-country database. OECD Economics Department Working Papers, 2017(1355), 64.http://dx.doi.org/10.1787/9ea89b4d-en

I OECD. (2015). Measuring and Monitoring BEPS, Action 11 - 2015 Final Report. Paris: Organisation forEconomic Co-operation and Development. Retrieved fromhttp://www.oecd-ilibrary.org/content/book/9789264241343-en

I Tørsløv, T. R., Wier, L. S., Zucman, G. (2018). The Missing Profits of Nations (Working Paper No.24701). National Bureau of Economic Research. https://doi.org/10.3386/w24701


Corporate tax gaps due to tax havensby income group

Source: Jansky and Palansky (2018)


Data-based effective tax rates 2011-15

Source: Jansky (2019) on the basis of Garcia-Bernardo, Jansky Tørsløv (forthcoming)


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Evaluation of tax gap: the scale of international