Taxing Multinational Corporations in the Globalised World (CORPTAX)

Basic research , Economics

2021 - 2025

Provider	Czech Science Foundation
Programme	JUNIOR STAR
Project code	21-05547M
Participants	Faculty of Social Sciences Charles University

We hypothesise that multinational corporations (MNCs) avoid paying corporate income taxes by exploiting a combination of globalisation and countries’ sovereignty to set tax policies. Consistent with this hypothesis, we propose a new framework: the inescapable trilemma of corporate taxation. We argue that only two of three policy goals in this trilemma – globalisation, sovereignty, and revenue – can be achieved at any given time. We hypothesise that, at present, revenue is not being achieved. We aim to test it by determining the extent to which the existing limited evidence of MNCs’ tax avoidance represents a general pattern. Unlike previous research, we will overcome the limitations of currently available data. We propose a new empirical methodology and use two breakthrough ideas to establish how much MNCs pay in taxes, where and why. First, we will pioneer the use of country-by-country reporting data from large MNCs. Second, we will combine that data with other sources and leverage their respective strengths to create the most comprehensive data set on MNCs.