The next RITM Economics Seminar will be held on Monday, September 29, 2025, from 12:15 to 13:15 in room Imbert (Sceaux).
Flora Bellone (GREDEG-Université Côte d’Azur) will present her paper “Tax avoidance by small multinationals as a side effect of anti-tax avoidance policy,” co-authored with Charlie Joyez and Xavier Poulet-Goffard (GREDEG).
Abstract: This paper examines the unintended consequences of the OECD’s Base Erosion and Profit Shifting (BEPS) that was adopted in 2015. While BEPS was designed to curb profit shifting by large multinational enterprises (MNEs), we hypothesize that it may have facilitated the adoption of corporate tax avoidance (CTA) practices by smaller MNEs. We test this research hypothesis on a panel dataset of French MNEs covering the 2012–2021 period. Our main findings are as follows: First, we show that firms with a turnover below the threshold of 750 million euros, a critical size threshold in the BEPS regulatory framework, have increased their likelihood to be settled in a tax haven post-BEPS. Second, we show that this effect is stronger for small MNEs that do not exhibit financial shareholders and/or consolidated accounts. We interpret this result as indirect evidence that the new BEPS guidelines have reduced firm dispersion in their idiosyncratic ability to avoid corporate taxes. Overall, our paper calls for a reassessment of global tax policies to ensure that anti-avoidance measures do not create new opportunities for tax base erosion at the extensive margin.
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Link to the RITM Economics seminar web page