TY - BOOK ID - 133640298 TI - Exploring Residual Profit Allocation AU - Beer, Sebastian. AU - Mooij, Ruud A. AU - Hebous, Shafik. AU - Keen, Michael. AU - Liu, Li. PY - 2020 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Public Finance KW - Taxation KW - Corporate Taxation KW - Investments: Stocks KW - Business Taxes and Subsidies KW - Taxation, Subsidies, and Revenue: General KW - Aggregate Factor Income Distribution KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Public finance & taxation KW - Corporate & business tax KW - Investment & securities KW - Marginal effective tax rate KW - Corporate income tax KW - Revenue administration KW - Average effective tax rate KW - Income KW - Tax policy KW - Taxes KW - National accounts KW - Stocks KW - Financial institutions KW - Tax administration and procedure KW - Corporations KW - Revenue KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:133640298 AB - Schemes of residual profit allocation (RPA) tax multinationals by allocating their ‘routine’ profits to countries in which their activities take place and sharing their remaining ‘residual’ profit across countries on some formulaic basis. They have recently and rapidly come to prominence in policy discussions, yet almost nothing is known about their impact on revenue, investment and efficiency. This paper explores these issues, conceptually and empirically. It finds residual profits to be substantial, but concentrated in a relatively few MNEs, headquartered in few countries. The impact on tax revenue of reallocating excess profits under RPA, while adverse for investment hubs, appears beneficial for lower income countries even when the formula allocates by destination-based sales. The impact on investment incentives is ambiguous and specific both to countries and MNE groups; only if the rate of tax on routine profits is low does aggregate efficiency seem likely to increase. ER -