 Moving on to our next presenter, Evgenia Dubenina. She's a PhD candidate and researcher at Charles University in Prague and focuses on taxation, international corporate tax avoidance, public international and development economics. So the stage is yours, Evgenia, thank you. Thank to everyone, especially for organisers for having our paper here at the conference. So I'm Evgenia and this project is co-authored with Katerina Bilitska from Utah University and Petriansky, my supervisor from Charles University. And the paper is called Fiscal Consequences of Corporate Tax Avoidance. So let's start. The big picture question topic that we ask here is how does profit shifting affect tax revenue structure? Probably all of you know that tax avoidance is increasing over time and profit shifting has been increasing, you know, like among multinationals nowadays. And the tax losses and also profit shifting, estimated by a lot of researchers, especially Gabriel Tsukman and also Petriansky, they are really high. Profit shifting comes at the forefront of political debate, especially after implementation of global minimum tax, but still we don't know what are the consequences of tax avoidance practices for where governments derive their tax revenues from. I will explain in a minute what do we mean by that. So the research question that we ask here is how does profit shifting affect tax revenue structure? We used two quasi-experimental variations. First is based on cross-country, differences in profit shifting. And the second one, we moved to causal inference, like the changes in municipal tax rates in Germany over a 12-year period. We have two sets of results, so based on country level and based on municipality level. And briefly, I will show you some findings. So first, at the country level with the increase of profit shifting, there is logically a decrease in corporate tax revenue. At the same time, there is an increase in individual tax revenue and VAT. If we move to municipality level, briefly the main results, we see that municipalities with higher tax rates and more tax-aggressive multinationals, they have lower share of tax revenues from those firms. I will explain in future slides what do we mean by aggressive multinationals. And with tax rate increase, a share of tax revenue derived from this tax decrease, but this only holds for municipalities with high share of aggressive multinationals. Let's move to first country level correlations. And I will start with the data. We have data from, of course, Univider GRD and also from IMF GFS. And profit shifting estimates come from the really good paper from Torsloff et al. I think that the year that is published now is 2023, so it's for estimates for four years and for 40 countries. What they do in their paper, they use foreign affiliate statistics to compare the profitability of foreign firms inside countries and the domestic one. And they receive results and profitability, so differences in profitability and they construct from these differences the profit shifting estimates as a percentage of GDP. And we use these estimates for our analysis. So what do we have to summarize the tax revenue structure and profit shifting estimates? If we look at several pictures, just correlations on vertical axis, we have corporate tax revenue as a percentage of total tax revenue. And on horizontal axis, we have profit shifting estimates as a percentage of GDP from Torsloff paper. And what do we see that there is a slide by decrease in the relationship? So with increase of profit shifting, there is a decrease in the corporate tax revenue as a percentage of total tax revenue. At the same time, if we look at similar picture, but in vertical axis, we have individual tax revenue as a percentage of total tax revenue. We have the opposite picture. And the third picture that I want to show you, it's the same, but the vertical axis is about VAT. And again, we have the positive relationship. So here we could think that governments could substitute probably corporate tax revenue losses with individual tax revenue and VAT. If we want to quantify these results, we could look at this table. And what do we see here that with increase of profit shifting, there is a decrease by almost 1.5 percentage point in corporate tax revenue. At the same time, there is an increase by 3.5 in individual tax revenue as a percentage of total tax revenue and by almost 2 percentage points in VAT. So again, we could think about this, that governments could substitute between corporate revenue losses with individual and VAT revenues. And what is more even interesting that we find no negative effects on total tax revenues. So governments could more than compensate with different sources of revenues. Here the first panel is the same as the table that was previously shown. So it's corporate tax revenues like all tax shares as a percentage of total tax revenue. The second panel is about tax rates, corporate tax rates, video tax rates and so on. The third panel, the last one, is about also tax shares, but as a percentage of GDP. And the left column is without controls, regressions without controls and on the right we have regressions with controls. And if we try to compare the first panel and the third panel, we see the same trend. So profit shifting, the relation between profit shifting and corporate tax revenue is negative and the relation between profit shift and individual tax revenues or VAT is positive one. And if we look at corporate tax rates and profit shifting, we see that there is a negative effect. And here we could think that governments could try to keep multinationals inside governments, inside countries with lower tax rates. Now we move to municipality level analysis, Germany context. And I will start with the institutional framework of Germany. Germany tax revenue is collected from different sources and like federal and state and municipality level. And federal and state accounts for almost 80% and mainly it's about personal, corporate income and VAT. And what is even more interesting that municipalities, they are responsible for tax rates of trade tax and property tax and also tax revenues derived from these taxes. So trade tax, if we move to municipality level, is levied on companies profits and it has the base rate which is equal across municipalities and there is a multiplier which is different across municipalities and they have control over this multiplier. And about property tax, like the structure is the same that there is a base rate and there is which is equal across municipalities and there is a multiplier which is different. And it accounts almost like for 14%. If we talk about like the rest, the rest is apportioned to and from federal and state. But the most important thing that we need to understand from this slide that municipalities control tax rates and tax revenue derived from trade tax and property tax because it's important for our identification strategy. The data comes from two main sources. The first source is German statistical office. The data is available online so everybody could download it. For 11,000 municipalities for years like from 2008 till 2018. And also we have another source, it's Orbeez database. But as you know Orbeez database, it's about from level but we have a municipality level analysis. And what we do here, we obtain, so we download the data from Orbeez for Germany. We obtain location for almost 4 million German firms. We match addresses to municipalities using g-software and then we actually identified the ownership structure if it's domestic one or multinational one. And then we classify this multinational into aggressive one and not aggressive one. So if multinational has at least one subsidiary in tax haven, we say that this multinational is the aggressive one. So this is how we define the aggressiveness of multinational. And in that of this process, we receive approximately 20,000 subsidiaries. 8,000 of them belong to more aggressive multinational. And as you remember, the unit of analysis municipality level and what we do here, we actually collapse the data from level to municipality level and we receive the share of aggressive multinational for each municipality. So again, like if we summarize the data, so we have the tax revenue structure and we have the profit shifting estimates but it's represented as aggressiveness of multinationals, the share of aggressiveness for each municipality. Our identification strategy based on two things. First is differences in tax rates across municipalities and the second one is differences in the shares of aggressive multinationals inside municipalities. And we have two sets of results. First is cross sectional variation. If you look at the equation, so on the left side, we have different outcome variables, tax revenues, trade tax revenues, property tax revenues, total tax revenues. And on the right side, we have the share of aggressive multinationals for each year, not for each year but for each municipality. Then we have tax rates and then we have multiplication of two and the set of controls and fixed effects. Then we move to events study. And events study based on the fact that more than 90% of municipalities increased their trade tax rates. Some of them increased like not only once. Then we move to several maps that I want to show you before we go to the results. This is a map of number of aggressive multinationals across municipalities. So with darker color, we have a higher number of aggressive multinationals inside municipalities. The white color is like we don't have the data, the green one is like the smallest number. And we see variation across municipalities in terms of the number of aggressive multinationals. If we move to the next map, it's about trade tax multipliers. Again, darker color means higher trade tax multipliers. And what is more even important, that variation here differs from the variation that we had like on previous slide. And the third map that I want to show you, it's about number of trade tax rate increases. As I mentioned, it was for some municipalities even like several times. So with dark color, these are municipalities that increase their trade tax rate like from five to nine times during the 12-year period. And then if we want to quantify our results, we could look at this table. So the first panel, panel A, it's about aggressive multinationals. And the second panel, panel B, is for all multinationals. And if we look at panel A, we could see that with tax rate increase and higher share of aggressive multinationals, there is a decrease in trade tax share. There is a decrease in trade tax revenue. At the same time, nothing happens with property tax revenue and there is a decrease in total tax revenue. But what is even more interesting that if we try to compare with the second panel, so placebo, we see that there are no effects. So it's only about aggressive multinationals that have opportunity to move their profits. If we move to event study analysis, we could look at this picture. So vertical axis is about the share of tax revenue in all tax revenues. And the gray color is about trade tax and the orange one is about property tax. And we see that with trade tax increase, there is a decrease in the trade tax as a percentage of total tax revenue. But nothing happens with property tax revenue. If we look at absolute values, so total tax revenues on vertical axis and we have trade tax, the blue one, property tax, the red one, a total tax, the green one, we see that with tax rate increase, there is a decrease in trade tax revenue and also property tax, sorry, trade tax revenue and total tax revenue. But nothing again happens with property tax revenue, which is logical because property couldn't be shifted so fast. The takeaway from our paper are the following. So the ability to shift profits tightly connected with tax revenue structure. Some countries that are more exposed to profit shifting could rely more on indirect taxes. And on the municipality level, profit shifting is causing a link to where the lower revenue shares come from corporations for the trade tax. If we think about policy implications from our study, we could think of the following. We show how governments could raise revenues in the absence or losses from corporate tax revenue and which groups bear the tax burden. And if we think that from research in the literature, we see that if indirect taxes are a more aggressive one, it's like food for third, like it could amplify inequalities. And the presence of aggressive multinationals inside municipalities could decrease their capacity, tax capacity of multinationals. Thank you very much. Your thoughts, questions are really welcome.