No. 256: A Critical Assessment of Tax Activists‘ Case Studies on Tax Avoidance by German Multinationals

NGOs and political parties publish case studies accusing multinational enterprises (MNEs) of systematic tax avoidance. We analyze three such case studies on German MNEs (BASF SE, Bayer AG, and Fresenius SE & Co. KGaA). We replicate the quantitative results presented in these studies to the extent possible and assess whether they can be considered methodologically sound. Our analysis reveals methodological weaknesses and one-sided argumentation. We therefore offer suggestions for improving the quality of future case studies from a scientific perspective. Our results also show that tax avoidance can hardly be reliably demonstrated on the basis of financial statement data.