There's been some discussion of this paper recently (because @TaxJusticeNet are, understandably, using estimates suggesting foreign MNEs avoid >50% of UK tax). I've read recently so here's a thread on my take of main issues. 1/ 
Paper uses UK corporate tax records matched to company accounts to ask how much tax MNEs avoid. Great question, cool data. (Can see what's on UK corp tax form here assets.publishing.service.gov.uk/government/upl…) 2/
Paper matches UK subsidiaries of foreign MNEs (with positive trading turnover & no further subsidiaries) to comparable domestic UK standalones (i.e. 2 groups look the same except former are part of MNE group). Method will miss largest MNEs (no comparable domestics) 3/
Key result: 60% of foreign-owned subs report zero taxable profit & paper reports this isn’t driven by groups (e.g. shifting cap allowances) or losses. Remaining 40% look no different to domestic firms. I think these are v. interesting results & plenty to like in paper but ...4/
I worry about backing out scale of profit shifting by assuming that foreign subs with zeros should be paying as much tax as domestic firms–key assumption (not measurement) is that profit shifting (via debt/transfer pricing) is the only difference between the two groups...5/
Red flag for me is preciseness of many of zeros- if these are trading subs how are they shifting exactly 100% of profits to get to exactly zero (i.e. not a loss)? We can’t rule out other unobserved differences (e.g. they’re co. holding assets but not regular trading subs) 6/
Others – @hselftax @DanNeidle @BillDodwellTax @iaincampbell07 – may have sense of which structures likely to explain large number of foreign owned UK subs with zero taxable profit. 7/
Whatever it is, it’s going up – graph shows fall in taxable profits to asset ratios and an increase in number of zeros.
None of this is a denial profit shifting happens or that subs with zeros are part of it. Also not an opinion on Oxford Business Centre – I’m a fan. I just think the estimates of £Xbn tax lost is a step too far because I don’t buy the key assumption behind it. Happy to discuss.
