Research

Download my dissertation, which collects the three working papers below.

Working Papers

Doeleman, R. Substance-ial Investment Shifting: The Role of Substance in Anti-Tax Avoidance Rules. Paper.

Multinational enterprises (MNEs) weigh the tax benefits of profit shifting to low-tax affiliates against the investment required under substance rules. Substance rules stipulate that if an MNE has enough investment in a low-tax country, it can continue shifting its profits there. This paper models how MNEs structure their corporate groups under anti-tax avoidance rules with substance exemptions. The model predicts two effects: an extensive margin effect where substance rules reduce the number of low-tax affiliates, and an intensive margin effect where remaining low-tax affiliates receive greater investment. I confirm this pattern in a staggered difference-in-differences design using affiliate-level data from 2010–2023.

Doeleman, R., D. Langenmayr, and D. Schindler. Could Country-by-Country Reporting Increase Profit Shifting?
CESifo Working Paper No. 11464; WU International Taxation Research Paper Series No. 2024-13; Paper.

Revise and Resubmit at American Economic Journal: Economic Policy.

Since 2016, Country-by-Country reporting has provided tax authorities with detailed information about multinationals’ worldwide activities. We model Country-by-Country reporting as increasing tax planning and tax audit costs for profit-shifting multinationals, where the latter costs depend on the share of profits in tax havens. Then, Country-by-Country reporting makes shifting profits from a high-tax country to a tax haven more attractive compared to shifting from a low-tax country. Thus, while total profits shifted to the haven decrease, profit shifting from high-tax affiliates may increase relative to the situation without Country-by-Country reporting. We confirm these changes in profit-shifting patterns using a difference-in-differences design.

Amberger, H., Doeleman, R., and Pendl, S. (Mis)measurement of Income Shifting. WU International Taxation Research Paper Series No. 2026-01; Paper.

We examine the reliability of financial statement data for measuring cross-border income shifting. Using a novel dataset of Austrian corporate tax returns matched with financial statement data, we estimate a tax semi-elasticity of taxable income reported on tax returns of -0.9. When we use financial statement profits instead of taxable income, the semi-elasticity decreases by more than 50%. This result suggests that financial statement profits understate the extent of income shifting observed in tax return data. As a result, studies that rely on financial statement data are likely to underestimate income shifting at the firm level. We offer practical guidance on how to correct for biases arising from the disparity between financial statement profits and taxable income.

Work in Progress

Amberger, H., and Doeleman, R. Real Effects of Income Shifting.

We study how income shifting and foreign corporate tax rate changes affect real activity within multinational enterprises. Combining Austrian corporate income tax returns with ownership data, we construct entity-level measures of income-shifting intensity and exploit variation from foreign corporate tax rate changes to disentangle investment responses to income shifting. Our findings indicate that firms with higher income-shifting intensity invest more in fixed assets but show lower productivity and greater overinvestment, distorting capital allocation efficiency. In contrast, a decrease in foreign tax rates reduces domestic fixed-asset investment, suggesting a reallocation toward lower-tax locations. We conclude that income shifting and tax rate changes have distinct effects on investment.