We use administrative tax data from 10 different developed and developing countries to calculate the within-country corporate elasticity of taxable income and investigate differences between these estimates. Our estimates exploit the differential tax treatment of business income for firms earning positive and negative taxable income in a bunching framework. We develop two new estimators to overcome several challenges that are unique to the business context. We find meaningful differences in the elasticity, with Greece having the largest (1.2) and Guatemala having the smallest (0.09). The differences we find, however, are much smaller than the range found in the literature (0 to 5). This suggests that some of the difference in the estimates in the literature may be due to differences in method rather than fundamental firm-specific characteristics, e.g., industry or tax system-specific characteristics, e.g., level of credits and enforcement.

This paper estimates the elasticity of taxable income to the corporate income tax (CIT) using a 20-years panel of tax administrative data on French companies. I leverage the implementation of a kink at 38.120AC in the CIT in 2001, under which the tax rate is reduced from 33.3% to 15%. I find large and dynamic bunching at the kink, up to 17% of the normal number of firms in 2012. This allows me to compute the elasticity of taxable income to the CIT rate, which ranges from -0.05 the first year of the reform to -0.23 ten years after. From 2013 onward, the bunching mass decreases which coincides with the introduction of a new payroll tax credit. Firms in the bunching mass come from below the kink and for some of them, far from it: more than 6.5 times below the kink, suggesting that they have very heterogeneous elasticities.

We assess firms' taxable income response to a dividend tax credit increase when corporate and personal taxes are integrated. First, we theoretically show that, in an integrated tax system, welfare changes stemming from a rise in corporate taxes depend on two parameters: the elasticity of taxable income with respect to the corporate tax rate and with respect to the dividend tax credit. Second, to estimate both parameters, we propose an identification strategy that relies on the bunching methodology and the excess bunching difference before and after a tax reform that increased the dividend tax credit. Using Canadian administrative tax data and the presence of a kink in the corporate tax system, we estimate these elasticities and empirically show that the increase in the dividend tax credit reduced the deadweight loss associated with an increase in the corporate tax by more than 50%.

We explore factors that contributed to a recent increase in macro-based profit shifting analyses, summarize the methods, and provide a meta-analysis of recent revenue loss estimates. We find a consensus estimate for tax revenue losses in the US of around 0.3 percent of GDP in 2022, which amounts to around 18 percent of total CIT collections. The meta-analysis reveals that double counting of income increases estimated revenue losses as does the use of statutory tax rates. The identification approach does not help explain variation in estimates. An important advantage of macro-data is its wider country coverage, enabling estimation of global revenue losses. A simple average of existing studies suggests that these amount to around 0.34 % of GDP or 12 percent of global CIT collections. The revenue potential from more effective measures to combat tax evasion, in the order of USD 200 billion annually, is significant and potentially larger than expected.