Conference Agenda

Over the past fifteen years, policymakers have implemented various measures to curb multinational tax avoidance, yet evidence on their effectiveness in low- and middle-income countries remains scarce. This study addresses this gap by analyzing administrative trade and corporate tax data from South Africa. We first examine trends in profit-shifting by comparing multinationals with and without tax haven affiliates, finding that firms with tax haven links experienced a smaller decline in profitability. Next, we assess the impact of two key reforms under the OECD’s BEPS project—the introduction of Country-by-Country Reporting and stricter transfer pricing documentation requirements. Using static and dynamic difference-in-differences estimators, we show that these measures reduced transfer mispricing in the goods trade, leading to lower prices and traded quantities with related entities in tax havens. Our findings contribute to the broader understanding of global tax regulation and the effectiveness of anti-profit shifting policies in developing economies.

Using a multi-country firm-level database matched with oil & gas production data, we find evidence of overbooking of windfall profits in tax havens. Relying on a triple difference-in-difference strategy in which we exploit the fact that extractive multinational firms specialize in different types of commodities, we find that a 1% increase in commodity prices leads to a 0.3% increase in non-upstream affiliates located in tax havens, but only an increase of 0.15% in non-upstream affiliates located in other countries, after controlling for sector specialization. We further find substantial heterogeneities along the extractive value chain, which have implications for the design of excess profit taxes.

How can tax authorities in low-income countries identify multinational enterprises (MNEs) engaged in profit shifting? In this project, we introduce a low-cost, data-driven methodology to identify profit-shifting MNEs using administrative data readily available to tax authorities in South Africa. By applying panel regression analysis and probabilistic detection methods, the method generates a variety of "red flags" for firms involved in suspicious activities, enabling tax authorities to prioritize high-risk cases for further auditing within their existing resource constraints. This approach empowers resource-limited tax authorities to target high-risk profit-shifting cases, supporting South Africa's broader revenue mobilization and fiscal sustainability goals. We contribute to the literature on profit shifting by presenting a novel method for identifying profit-shifting behaviours, which can be adapted by other low-income countries facing similar challenges.

Aggressive profit shifting by MNEs is a growing concern for domestic resource mobilization in developing economies. This paper evaluates the revenue and welfare consequences of a flagship anti-avoidance rule that has been implemented in morethan45countries to prevent profit shifting by MNEs through the debt channel. Our focus is Uganda, a representative developing country which implemented the rule in 2018. Exploiting admin data comprising the universe of corporate tax returns, we find that the rule does not significantly increase profits reported by MNEs in Uganda or tax remitted by them in Uganda. As an unintended consequence, however, the implementation of the rule leads to a contraction in real economic activity, reducing the turnover, employment, and trade of treated MNEs. We highlight the limited targeting efficiency of the rule, questioning its overall effects on welfare.