The Impact of Multinationality and Tax Havens on Corporate Tax Avoidance: A Literature Review

Abstract

This study synthesises empirical and review evidence on the relationship between multinationality, tax-haven utilisation, and corporate tax avoidance, with particular attention to profit-shifting mechanisms and the Indonesian context. The review uses a structured Systematic Literature Review (SLR) process informed by the PRISMA 2020 reporting framework. The revised evidence base comprises 19 core journal articles published between 2016- 2026, supplemented by theoretical, methodological, and contextual sources. The synthesis shows that the relationship between multinationality and tax avoidance is heterogeneous: positive, negative, and insignificant findings appear across studies, and the differences are associated with country setting, sector, observation period, measurement proxies, and governance or regulatory conditions. Evidence on tax-haven utilisation is predominantly positive but not uniform, with recent studies also reporting insignificant relationships. Three recurring profit-shifting mechanisms are identified: debt shifting, strategic transfer pricing, and the location of intangible assets in low-tax jurisdictions. Publication patterns also indicate a recent concentration of studies on tax havens, profit shifting, governance, and multinationality, while Indonesian research increasingly examines moderators such as audit quality and independent commissioners. The review concludes by identifying measurement, post-Pillar Two, governance, and mixed-method research gaps for future empirical work.