...Katharine D. Drake; Nathan C. Goldman; Francis Murphy ABSTRACT We examine the effect of foreign employment on two outcomes—income shifting and the tax uncertainty of foreign transactions. Using a hand-collected sample of employment disclosures, we partition our sample into firm-years with a higher...

... targeted income shifting that minimizes worldwide and domestic current taxes. Because shifting essentially all income out of the U.S. represents a very aggressive form of international tax planning, Small firms represent an important margin for understanding the income shifting of U.S. MNCs. We find...

...Bradford F. Hepfer; Jaron H. Wilde; Ryan J. Wilson ABSTRACT Using the shadow insurance setting, we study the interplay between tax and nontax incentives in income shifting. Shadow insurance involves intercompany transactions designed to help firms meet regulatory capital requirements. However...

...Kevin S. Markle; Lillian F. Mills; Braden Williams ABSTRACT The effects of tax rate changes on corporate profitability are not fully understood. Implicit tax theory predicts a positive relation between country-level tax rates and firm-level pretax returns. Conversely, income shifting should make...

... as transfer pricing risk increases. Our evidence sheds light on the importance of R&D-related income shifting that potentially separates the location of economic activity from the location of income. JEL Classifications: H25; H26. For their helpful comments and suggestions, we thank Dan Collins...

...Arnt O. Hopland; Petro Lisowsky; Mohammed Mardan; Dirk Schindler ABSTRACT This study examines the flexibility of multinational firms to adjust their income-shifting strategies—whether using transfer pricing or internal debt—during the tax year to react to affiliates' operating losses. We develop...

...Lisa De Simone; Kenneth J. Klassen; Jeri K. Seidman ABSTRACT Income shifting from high-tax to low-tax jurisdictions is considered a primary method of reducing worldwide tax burdens of multinational firms. Current losses also affect income shifting incentives. We extend prior approaches...

... firms will be unable to defer repatriation and, therefore, will reap no benefits from shifting. Using a new methodology for measuring income shifting, we find, consistent with predictions, that financially constrained firms shift less income from the U.S. to foreign countries than their unconstrained...