Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/198591
Authors: 
Menkhoff, Lukas
Miethe, Jakob
Year of Publication: 
2019
Series/Report no.: 
DIW Discussion Papers 1711
Abstract: 
Recent efforts to reduce international tax evasion focus on information exchange with tax havens. Using bilateral bank data for 1,397 country pairs in a balanced quarterly panel from 2003:I - 2017:IV, we first show that information-on-request treaties with tax havens reduce bank deposits in tax havens by 27.5%. Second, also deposits from tax havens in high tax countries decline after such treaties are signed, giving authorities a second angle to detect tax evasion. Both reactions dissipate overt time and treaties signed after 2010 trigger no further reactions. These results cannot be explained by deposit shifting alone and we find no evidence of transitioning into legality. Third, recent policy initiatives based on the automatic exchange of bank information lead to very similar initial reactions as earlier treaties, consistent with adjustments on the part of tax evaders. This suggests that tax evaders adapt to established information exchange treaties by using new disguises to hide their true income, and react again to new measures. These results cast doubt on the effectiveness of current forms of information exchange to tackle international tax evasion.
Subjects: 
Tax evasion
international information exchange treaties
international bank deposits
tax havens
JEL: 
H26
F38
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.