Nuremberg Research Seminar in Economics on 6 November 2019
You are invited to join the weekly Nuremberg Research Seminar in Economics on 6 November 2019, from 13.15 to 14.45 pm. The seminar will be held in room Number LG 0.423. Dominika Langenmayr (University of Eichstätt-Ingolstadt) will be talking about “Trading Offshore: Evidence on Banks’ Tax Avoidance”.
Please find below the abstract:
Little is known about how banks shift profits to low-tax countries. Because of their specific business model, banks use profit shifting channels different from those of other firms. We propose a novel and bank-specific method of profit shifting: the strategic relocation of proprietary trading to low-tax jurisdictions. Using regulatory data from the German central bank, we show that a one percentage point lower corporate tax rate increases banks’ fixed-income trading assets by 4.0% and trading derivatives by 9.0%. This increase does not arise from a relocation of real activities (i.e. traders); instead, it stems from the relocation of book profits.