Economics seminar: Profit shifting through transfer pricing: evidence from French firm level trade data - Vincent Vicard

Event Date: 6 May 2015

Using detailed firm level export and import data by destination and product for France, I show that the price wedge between arm's length trade and related party trade varies systematically with the differential in corporate tax rate between France and the partner country. Profit shifting through transfer prices is estimated to have reduced the French corporate tax base by 8 bn USD in 2008. Its extent is growing in France over the 2000s, impacting external imbalances. The related missing tax revenues amounts to 10% of the corporate tax paid by multinational groups located in France that trade with related party.

Published: 29 September 2015