蝌蚪网 Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Exploring Residual Profit Allocation
蝌蚪网 Journal: Economic Policy
(pp. 70–109)
Abstract
Residual profit allocation (RPA) schemes have come to prominence in discussions of international tax reform but with almost nothing known about their economic impact. These schemes tax multinationals by allocating their "routine" profits to source countries and sharing their remaining "residual" profit across countries on some formulaic basis. This paper explores the implications, conceptual and empirical, of moving to some form of RPA. Residual profits are estimated to be substantial and concentrated in relatively few multinational enterprises. The impact on tax revenue appears beneficial for developing countries. Aggregate production efficiency is unlikely to increase unless routine profits are lightly taxed.Citation
Beer, Sebastian, Ruud de Mooij, Shafik Hebous, Michael Keen, and Li Liu. 2023. "Exploring Residual Profit Allocation." 蝌蚪网 Journal: Economic Policy 15 (1): 70–109. DOI: 10.1257/pol.20200212Additional Materials
JEL Classification
- F23 Multinational Firms; International Business
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H87 International Fiscal Issues; International Public Goods
- L25 Firm Performance: Size, Diversification, and Scope