Calendrier du 16 décembre 2022
EU Tax Observatory Seminar
Du 16/12/2022 de 13:00 à 14:00
Salle R1.13, Campus Jourdan
PARENTI Mathieu (PSE & INRAE)
Multinational Enterprises and International Tax Shifting: Evidence from Shutting Down the Mauritius Route to India
écrit avec joint with Josh De Lyon (Oxford & OECD) and Swati Dhingra (London School of Economics, CEP, & CEPR)
Multinational enterprises exploit gaps in international taxation rules to artificially shift their tax liability to low-tax countries. Huge empirical challenges arise in understanding international tax loopholes due to limited coverage of tax haven countries in available data sources and even more limited experience of plugging tax loopholes internationally. This paper contributes to both these areas by examining foreign investments and international tax loopholes through new administrative transaction data from India. Gravity models of Foreign Direct Investment (FDI) inflows to India show a stark outlier - Mauritius - with which India has a bilateral tax treaty that contained a loophole allowing both Indian and foreign firms to avoid capital gains tax on profits of company sales. In 2016, India and Mauritius agreed to reform treaty, removing the loophole. and changing effective tax rates to investments in India through Mauritius. Following the reform, we show that the volume of FDI flowing to India through Mauritius falls, compared to FDI from other routing countries. Firm-level micro data confirms the finding that foreign investors reduced their investments through Mauritius, with some diversion to investments from other tax haven channels. Indian firms who had received FDI through Mauritius before the policy change did not experience a relative fall in total FDI inflows. Plugging international tax loopholes therefore reduced tax avoidance possibilities without sacrificing much the potential to attract foreign investment.
PSE Internal Seminar
Du 16/12/2022 de 12:30 à 13:30
R2-01
VANDEN EYNDE Oliver (PSE)
DURANTE Ruben(BSE)
Media Capture by Banks
with Andrea Fabiani, Luc Laeven, José-Luis Peydró
Do banks exploit lending relationships with media companies to promote favorable news coverage? To test this hypothesis we map the connections between banks and the top newspapers in several European countries and study how they affect news coverage of two important financial issues. First we look at bank earnings announcements and find that newspapers are significantly more likely to cover announcements by their lenders, relative to other banks, when they report profits than when they report losses. Such pro-lender bias applies to both general-interest and financial newspapers, and is stronger for newspapers and banks that are more financially vulnerable. Second, we look at a broader public interest issue: the Eurozone Sovereign Debt Crisis. We find that newspapers connected to banks more exposed to stressed sovereign bonds are more likely to promote a narrative of the crisis favorable to banks and to oppose debt-restructuring measures detrimental to creditors.