This paper examines real responses of large multinational enterprises (MNEs) to tax by studying the global allocation of their business functions such as manufacturing and sales or financial and holding functions. Drawing on a novel dataset , the study explores the relationship between the location of such business functions and effective corporate taxation. The findings indicate that higher average effective tax rates are associated with a lower prevalence of functions related to holding or the provision of internal group finance. In contrast, more routine functions, such as sales or manufacturing appear less sensitive to average effective tax rates. Finally, business functions also respond to a variety of other features of CIT systems, such as tax incentives, loss carryover provisions, or anti-avoidance rules. The results offer valuable insights into the structure of MNEs global value chains, as well as the real economic impacts of corporate taxation.