This paper attempts to identify the main channels for the propagation of the macroeconomic effects from corporate profit shifting into tax havens. This question is answered by building a general equilibrium model that introduces firm profit shifting to tax havens in a multi-country environment with production networks. In this model, haven jurisdictions specialize and compete for shifted profits by trading concealment assets in a differentiated oligopolistic environment, and non-haven countries defend these profits by setting enforcement levels over capital flows. The central point of the model is that profit shifting introduces two classes of optimal distortions, first, rebated distortions that by modifying the terms of trade and the effective marginal tax rate alter the decision of firms, but also wasted distortions that optimally squander resources via enforcement policies and the corporate costs that firms have to incur in order to access and develop concealment strategies. I show that the main transmission channels for the propagation of these distortions occurs by increasing corporate dividends, the tax base, and wages in tax havens; while non-haven countries are affected by opposite effects in addition to the wasted distortions. We confirm these results in a three country one sector global economy that additionally provides evidence about the relevance of the structure of the production network and the consumption bundle in the magnitude of the effect from introducing profit shifting.