No. 799 - Clever planning or unfair play? Exploring the economic and statistical impacts of tax avoidance by multinationals

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by Alessio Anzuini, Elena Pisano, Luca Rossi, Alessandra Sanelli, Enrico Tosti and Ernesto ZangariOctober 2023

The paper gives an overview of tax avoidance by multinationals, analysing its main features and economic implications and providing a review of the empirical literature available globally and for Italy, as well as of the international initiatives adopted to curb it. The work also examines the effects of tax avoidance by multinationals on official external statistics, focusing on the role played by tax havens and providing some empirical evidence, especially for Italy.

Although affected by considerable uncertainty, estimates of tax avoidance indicate that the phenomenon is non-negligible. The impact of the recent international initiatives adopted to curb it will become fully assessable only over the coming years. In addition to competition, tax avoidance biases external statistics due to the significant weight of tax havens (30-40 per cent for foreign direct investments), and Italian data show a greater bias compared with the global average. The reconstruction of actual stocks shows a significantly different picture from the official one.