Work detail

Country-by-Country Reporting Data and Profit Shifting of Banks

Author: Bc. Anna Bartoňová
Year: 2017 - summer
Leaders: Petr Janský Ph.D.
Work type: Bachelors
Language: English
Pages: 42
Awards and prizes:
Abstract: Base erosion and profit shifting is a great concern of governments as well as the
misalignment of the taxable income. With recently obtained country-by-country data we can
address and measure the profit misalignment of financial institutions for 2014 – 2016.
Using apportionment formula, we estimate the common consolidated corporate tax base
(CCCTB) of each bank for every country specifically. The CCCTB then corresponds to profit
created by real economic activity of a given bank in every country. We then observe the
difference between CCCTB and actual taxable income, which determines the size of profit
We determine that around 30 % of world’s income before tax is shifted to jurisdictions
without accompanied economic activity. We find out that there is no time trend among the
We conclude that large economies, such as United Kingdom, France, and Italy suffer
more from profit misallocation, however, profit-havens Hong Kong, Ireland, or Luxembourg
take advantage of the current system. We see that the Netherlands and Switzerland, which are
usually considered to be tax havens, are with regard to bank industry, currently understating
their income compared to the real economic activity in these countries.


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