On the dynamics between local and international tax planning in multinational corporations

Christof Beuselinck, Jochen Pierk

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Scopus)


The international dimension of multinational corporations creates opportunities for pursuing both global as well as local (i.e., unilateral subsidiary country) tax planning strategies. To date, however, researchers have limited insights into both the dynamics and relative importance of one versus another strategy for multinationals. We propose and test a group-level ETR-based measure of profit shifting and validate it by showing it correctly identifies profit shifting reductions when shifting costs increase. We confirm that multinationals can keep group ETRs stable after the introduction of tighter tax compliance and documentation rules and suggest they can do so by relying relatively more on local tax planning. In line with the substitution argument, we document that especially groups identified as ex-ante income shifters as well as those with greater target ETR pressure are responsible for the results.
Original languageEnglish
Pages (from-to)852-888
Number of pages37
JournalReview of Accounting Studies
Issue number1
Early online date7 Oct 2022
Publication statusPublished - 7 Feb 2024

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