Multinational groups may use services transactions between firms of the same group to shift profits from high-tax to low-tax countries, a strategy usually denominated as profit shifting. The analysis explores whether those potential practices translate into an unusually large propensity of multinationals to import intra-group services from tax havens and/or into an excessive value of those imports.
It is shown that in Portugal – a high-tax country where policies significantly discourage transactions with tax havens, multinational groups do not display a systematic excessive propensity to import intra-group services from tax havens. They even systematically avoid importing from the havens that are directly targeted by Portuguese anti-tax planning policies. This notwithstanding, the value of imports by some groups from a subset of tax havens is abnormally large.