<p>Redirecting royalty payments across jurisdictions is a well-known strategy of large multinationals to reduce corporate income taxation. The global impact of these taxes on the direction and size of the royalty payments is, however, seldom investigated. From our network analysis, based on national and bilateral tax rates, we infer which bilateral payments could be tax motivated and which could only be business motivated. Next, we apply a gravity framework with PPML estimators to explain the variation in the latter payments. Using these regression outcomes to predict the business motivated content of the other royalty payments, we find that 13–25% of all flows is motivated by tax planning, which reduces tax revenues by 3.3–8 billion US dollar in 2018 in our preferred specification. We argue that both estimates are lower bounds, mainly due to missing observations. To the best of our knowledge these are the first estimates of the global tax revenue loss by redirecting royalties.</p>