What does this research mean for the field?

A synthesis of 35 years of empirical research provides comprehensive evidence on the prevalence, facilitating firm characteristics, nontax constraints, and unintended consequences of multinational tax-motivated income shifting. Novelty: ClaimNovelty.SYNTHESIS. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To assess the prevalence of income shifting among firms and identify factors influencing this strategy.

May 30, 2026Open Access

A Review of Empirical Research on Multinational Tax-Motivated Income Shifting

Key Points

To assess the prevalence of income shifting among firms and identify factors influencing this strategy.
Integrated 35 years of empirical research on multinational income shifting
Utilized the Scholes-Wolfson tax planning framework
Connected findings with practice and policymaking
Income shifting is prevalent in the global economy under certain firm conditions.
Nontax costs significantly constrain income shifting activities.
Unintended consequences arise from income shifting practices, affecting policy implications.

Abstract

SYNOPSIS The political, academic, and practical significance of corporate tax-motivated income shifting raises important questions related to this complex tax planning strategy: (1) Is income shifting prevalent in our global economy? (2) What firm conditions and characteristics facilitate income shifting? (3) What nontax costs constrain income shifting? (4) What are the unintended consequences of income shifting? In this paper, we integrate 35 years of empirical research on multinational income shifting within the context of the Scholes-Wolfson tax planning framework to evaluate existing evidence addressing these questions. We then connect these findings with practice and policymaking and discuss opportunities for future research. JEL Classifications: H26; M48.

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