Multinational corporations can often reduce their global tax liabilities through profit-shifting activities (Chapter 5). Typical examples include transfer price manipulation, intracompany debt, and the strategic location of intangible assets, such as intellectual property. There is plenty of empirical evidence that reported profits by multinationals indeed respond to international tax differentials. A recent survey article (Beer, de Mooij, and Liu 2020) estimates the consensus value of the semi-elasticity of reported profits with respect to international tax differential to be 1.5. That is, a 1 percentage point reduction in the statutory corporate income tax rate in a certain location is expected to raise reported profits by multinationals in that location by 1.5 percent, all else equal.