ABSTRACT In this study, we examine the effect of increased tax transparency on planning behavior European banks. 2014, Union introduced public country‐by‐country reporting requirements to banking industry. Treating new requirement as an exogenous shock, find limited evidence consistent with a decline in income shifting by banks' financial affiliates post‐adoption period (starting from 2015). We do not, however, robust significant change consolidated book effective rates among affected Our...

ABSTRACT The Organization for Economic Cooperation and Development introduced country‐by‐country reporting (CbCR) multinational enterprises (MNEs) to help tax authorities combat tax‐motivated income shifting. This study uses confidential U.S. administrative data from 2011 2018 examine the effect of CbCR adoption on shifting real activities MNEs. We first document that while provides Internal Revenue Service with incremental information about location MNEs’ global relative existing return...

This study examines the stock market reaction to unprecedented leaks of confidential advance tax rulings between Luxembourg and multinational corporations—also known as "LuxLeaks." Contrary negative shelter news documented in prior research, we find that investors responded positively these leaks. is concentrated among U.S. firms. Furthermore, document a positive association abnormal returns reduction firms' uncertainty, consistent with downward revision investors' perception uncertainty...

The Organization for Economic Co-operation and Development introduced country-by-country reporting (CbCR) multinational enterprises (MNEs) to help tax authorities combat tax-motivated income shifting. This study uses confidential administrative data from 2011 2018 examine the effect of U.S. CbCR adoption on shifting real activities MNEs. We first document that provides Internal Revenue Service with incremental information about MNEs' international operations in both low-tax non-low-tax...

Abstract In 2018, the European Union (EU) introduced a new mandatory reporting requirement for wide range of cross‐border tax arrangements (EU Directive 2018/822, also known as DAC6). Unlike prior corporate transparency initiatives, which put responsibility primarily on taxpayers, this directive puts initial third‐party intermediaries who are involved in reportable arrangement at any stage during planning and execution process. We exploit adoption DAC6 EU to examine effectiveness curbing by...

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In this study, we examine the effect of increased tax transparency on planning behavior European banks. 2014, Union introduced public country-by-country reporting requirements to banking industry. Treating new requirement as an exogenous shock, find limited evidence consistent with a decline in income-shifting by banks' financial affiliates post-adoption period (starting from 2015). We do not, however, robust significant change consolidated book effective rates among affected Our findings...

Governments and regulators have increased corporate taxpayer transparency requirements in an attempt to reduce abusive tax behavior. Historically, these rules fallen on taxpayers, requiring them self-report information. We exploit the requirement for third-party advisors report a broad set of cross-border arrangements under EU Directive 2018/922 (commonly known as DAC6) investigate impact external (to firm) reporting Using difference-in-differences research design, we provide evidence that...

To combat tax avoidance, 58 countries have fully mandated multinational enterprises to disclose their income and economic activities authorities on a country-by-country reporting (CbCR) basis from 2016 onwards. We examine whether this policy shock results in more informative expenses for capital market participants. Drawing analyst forecasting, we develop novel approach capture the extent of misalignment perceived by markets find that declines after CbCR adoptions. Further, demonstrate...

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