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How do we get multinational companies to pay fairer taxes?

Why we need public country by country reporting for multinational companies from Eurodad, the European Network on Debt and Development)

Here are some FAQs to go with the video: Q. Where does the estimate that $500billion is lost to tax avoidance come from? A. The figure estimating that $500billion is lost to tax avoidance annually comes from Cobham, Alex, and Petr Janský, Global Distribution of Revenue Loss From Tax Avoidance: Re-Estimation And Country Results, WIDER Working Paper 2017/55 Helsinki: UNU-WIDER, 2017 Q. Where does the estimated cost of financing education come from? A. The figure estimating that $39billion is the annual financing gap for reaching universal pre-primary, primary and secondary education of good quality in low and lower middle-income countries comes from UNESCO Pricing the right to education: the cost of reaching new targets by 2030. ED/EFA/MRT/2015/PP/18.…

Q. Where does the estimate that SMEs pay a higher effective tax rate come from? The estimate that SMEs’ effective tax rate is up to 20% higher than large multinational companies comes from Spengel, Christoph et al, SME taxation in Europe: An empirical study of applied corporate income taxation for SMEs compared to large enterprises. CIP Programme 186/PP/ENT/CIP/12/F/S01C24…

. While the research suggests the rate may be as high as 30%, the evaluation of other research and methodologies means the 20% figure is the most conservative credible figure and methodologically, generally accepted as robust. This is also what the Commission refer most to in their impact assessments. Q. How do you know existing public CBCR for banks has influenced their behaviour? A. Researchers Overesch and Wolff assessed the public CBCR for the banking sector and highlighted that “multinational banks increased their tax expenses relative to unaffected other banks after Country-by-Country Reporting became mandatory”. The study also found “a pronounced response of those banks that were particularly exposed to the new transparency due to significant activities in tax havens” and concluded that “Country-by-Country-Reporting can be an additional instrument for policy makers to curb corporate tax avoidance”. Overesch, Michael and Wolff, Hubertus, Financial Transparency to the Rescue: Effects of Country-by-Country Reporting in the EU Banking Sector on Tax Avoidance (July 1, 2018). Available at SSRN:


Q. How do you know developing countries lose proportionally more to tax avoidance? A. The IMF estimates that developing countries lose proportionally more of their GDP to tax avoidance resulting from base erosion and profit shifting and tax havens. A 2015 IMF Working Paper estimates worldwide losses due to base erosion and profit shifting (BEPS) and relating to tax havens to be approximately USD 600 billion per year; notes that the IMF long-run approximate estimates are USD 400 billion for OECD countries (1 % of their GDP) and USD 200 billion for developing countries (1,3 % of their GDP). Ernesto Crivelli, Ruud De Mooij and Michael Keen, Base Erosion, Profit Shifting and Developing Countries, IMF Working Paper, 2015.

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