Research
Publication
Effective tax rates, firm size and the global minimum tax
(with Pierre Bachas, Anne Brockmeyer and Roel Dom) Journal of Public Economics, September 2026.
Presented at the 4th World Bank Tax Conference (Video), the 2022 Annual Congress of the IIPF, and the PSE workshop in International Trade. Coverage from UCL Stone Centre. Replication code here.
This paper studies how tax expenditures shape the distribution of firm-level effective tax rates and their implications for domestic minimum taxes under the global minimum tax (GMT). Using administrative corporate tax returns from 16 countries, we document that tax expenditures are large and that effective tax rates tend to follow a hump-shaped pattern across the firm-size distribution, with particularly low rates among the largest firms. As a result, more than one quarter of the largest firms have effective tax rates below the 15-percent GMT rate, despite substantially higher statutory rates. However, firm-level simulations from five countries with data on subsidiaries of multinationals suggest that GMT-consistent domestic minimum taxes would likely generate modest revenue gains—a few percentage points of baseline CIT revenue—reflecting the small number of firms in scope and extensive deductions.
The Impact of COVID-19 on Formal Firms: Lessons from Administrative Tax Data
(with Pierre Bachas, Anne Brockmeyer and Pablo Garriga) Journal of Development Economics, February 2025.
Presented at the 2021 Annual Congress of the IIPF. Coverage from the Economics Observatory and UCL Stone Centre. Replication code here.
Most low-income countries lack high-frequency firm-level data to monitor the effect of economic shocks in real time. We examine whether administrative tax data can help fill this gap, in the context of the COVID-19 pandemic. In spring 2020, we used the full population of corporate tax returns for 2019 in six developing countries to predict the effect of COVID-induced shocks on formal firms' activity. Comparing the predictions to the realized 2020 data, we find that firms were more resilient than predicted: the share of unprofitable firms increased by only 7 percentage points, while aggregate profits and taxes paid remained stable. The simulations failed to anticipate that labor and capital inputs would flexibly adjust and that large firms would be very resilient. Complementing our simulations with higher-frequency VAT data would have markedly improved predictions.
Working Papers
The Distribution of Profit Shifting
with Sarah Clifford and Jakob Miethe
Work in Progress
Shifting for Real: Investment Responses to the U.S. Minimum Tax
Corporate Taxes and Economic Activity at Home and Abroad (Working title) with Sarah Clifford, Gerwin Kiessling and Jakob Miethe