We study profit shifting using a novel source of administrative data on transactions of multinational corporations in Nigeria with related parties abroad. The data categorizes intra-group transactions into seven types: tangible goods, service and fees, royalties, interest, dividends, reimbursements, and other. We identify transactions most used for profit shifting and their relative importance. Profits reported in Nigeria are highly sensitive to hypothetical tax paid in partner jurisdictions: a 1 per cent increase in hypothetical tax on outgoing transactions is associated with a 0.71 per cent increase in reported profits in Nigeria. Payments for interest and service and fees emerge as key profit-shifting channels.
For the most up-to-date version, supplemental data and code, and other information, see here.