The idea that corporations should be taxed in the jurisdiction where they make their sales or provide their services is getting more and more attention in the policy debate on international taxation. In 2016, U.S. House Speaker Paul Ryan proposed to introduce a destination-based cash flow tax (DBCFT) in order to reform the United States’ corporate income tax (CIT). Moreover, in the last few years, more and more countries have considered the adoption of new rules to tax the digital economy in the country where the users and/or the consumers are located. These proposals differ from traditional direct taxes imposed on corporations. They borrow from the tax design of indirect taxes, such as sales taxes or value added taxes. Consequently, it is difficult to predict whether these sui generis destination-based taxes will fit in with superior legal provisions, in particular international tax and trade law. One recurring legal argument against destination-based taxes is that they are likely to violate the law of the World Trade Organization (WTO). Using the DBCFT as a case study, this Article will assess the different conflicts that could arise between new types of destination-based taxes and international trade law. Based on a critical approach informed by the analysis of the history and case law surrounding destination-based taxes, this Article concludes that the likelihood that a DBCFT would be found incompatible with international trade law is much lower than past legal scholars have concluded. WTO law does not in itself prevent countries from adopting such taxes. Since this conclusion could be extended by analogy to other, new types of destination-based taxes, this Article could have important implications for policymakers who are willing to move towards taxation in the country of destination.
{"title":"Don’t Blame It on WTO Law: An Analysis of the Alleged WTO Law Incompatibility of Destination-Based Taxes","authors":"A. Pirlot","doi":"10.2139/ssrn.3551877","DOIUrl":"https://doi.org/10.2139/ssrn.3551877","url":null,"abstract":"The idea that corporations should be taxed in the jurisdiction where they make their sales or provide their services is getting more and more attention in the policy debate on international taxation. In 2016, U.S. House Speaker Paul Ryan proposed to introduce a destination-based cash flow tax (DBCFT) in order to reform the United States’ corporate income tax (CIT). Moreover, in the last few years, more and more countries have considered the adoption of new rules to tax the digital economy in the country where the users and/or the consumers are located. These proposals differ from traditional direct taxes imposed on corporations. They borrow from the tax design of indirect taxes, such as sales taxes or value added taxes. Consequently, it is difficult to predict whether these sui generis destination-based\u0000taxes will fit in with superior legal provisions, in particular international tax and trade law. One recurring legal argument against destination-based taxes is that they are likely to violate the law of the World Trade Organization (WTO). Using the DBCFT as a case study, this Article will assess the different conflicts that could arise between new types of destination-based taxes and international trade law. Based on a critical approach informed by the analysis of the history and case law surrounding\u0000destination-based taxes, this Article concludes that the likelihood that a DBCFT would be found incompatible with international trade law is much lower than past legal scholars have concluded. WTO law does not in itself prevent countries from adopting such taxes. Since this conclusion could be extended by analogy to other, new types of destination-based\u0000taxes, this Article could have important implications for policymakers who are willing to move towards taxation in the country of destination.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124561641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Richard A. Highfield, C. Evans, B. Tran-Nam, M. Walpole
This report sets out the findings of an extended study designed to test a diagnostic tool that has been developed for use in comparative cross-country assessments of the VAT compliance burden and its main drivers. It is based on data gathered from surveys conducted in the 47 member countries of the Forum on Tax Administration (FTA) that administer a Value Added Tax (VAT) or Goods and Services Tax (GST) regime.
{"title":"Diagnosing the VAT Compliance Burden: A Cross-Country Assessment","authors":"Richard A. Highfield, C. Evans, B. Tran-Nam, M. Walpole","doi":"10.2139/ssrn.3726376","DOIUrl":"https://doi.org/10.2139/ssrn.3726376","url":null,"abstract":"This report sets out the findings of an extended study designed to test a diagnostic tool that has been developed for use in comparative cross-country assessments of the VAT compliance burden and its main drivers. It is based on data gathered from surveys conducted in the 47 member countries of the Forum on Tax Administration (FTA) that administer a Value Added Tax (VAT) or Goods and Services Tax (GST) regime.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"520 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123132479","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
German Abstract: Die fehlende Prinzipienbildung im Sanierungssteuerrecht scheint ein zentraler Grund dafür zu sein, dass das Sanierungssteuerrecht seit Jahrzehnten als unstrukturiert, unvorhersehbar und sanierungsunfreundlich eingeschätzt wird. In dieser Arbeit werden vier Grundprinzipien herausgearbeitet, die dieses Rechtsgebiet künftig stabilisieren sollen. Dazu gehört (i) der Schutz des steuerlichen Systems der Gewinnermittlung, (ii) die Selbstbindung der Verwaltung auch in der Sanierung des Steuerpflichtigen, (iii) das Leistungsfähigkeitsprinzip und spezielle Typisierungen in der Sanierung und (iv) der auf den Fiskus anzuwendende Gläubigergleichbehandlungsgrundsatz.
English Abstract: The lack of formation of principles in restructuring tax law seems to be a central reason for the fact that restructuring-related tax law has been regarded as unstructured, unpredictable and restructuring-unfriendly for decades. In this article, four basic principles are elaborated which should stabilise this field of law in the future. These include (i) the protection of the tax system of profit determination, (ii) the self-obligation of the financial administration also in the restructuring of the taxpayer, (iii) the principle of efficiency and special typifications in the restructuring phase and (iv) the principle of equal treatment of creditors to be applied to the tax authorities.
自由主义抽象:基本建设税法缺少"原则形成"似乎是几十年来公众对基本建设法不可分割、不可预知和不友好的主要原因。在这项工作中，必须确定关于这一工作的四项基本原则。这包括:(一)保护收益调研的财政制度;(二)行政机构的自我承诺也包括重组应人民，(三)重组的角色和具体指示，以及(四)适用于财政歧视法原则。英语抽象式:结构改革中编造出的概念在炮台里，四架基本发动机正准备在未来稳稳地稳住这个地方的法律领域。论文include (i)苏维埃联邦税系统of determination利润;(ii)《the self-obligation离任所以协议——《restructuring,《金融(iii) the principle of efficiency and特殊typifications restructuring阶段and the principle of平等(iv)“人权creditors applied to the所取代大税authorities .
{"title":"Grundprinzipien des Sanierungssteuerrechts (Basic Principles in Restructuring Tax Law)","authors":"Dominik Skauradszun","doi":"10.2139/ssrn.3468807","DOIUrl":"https://doi.org/10.2139/ssrn.3468807","url":null,"abstract":"<b>German Abstract:</b> Die fehlende Prinzipienbildung im Sanierungssteuerrecht scheint ein zentraler Grund dafür zu sein, dass das Sanierungssteuerrecht seit Jahrzehnten als unstrukturiert, unvorhersehbar und sanierungsunfreundlich eingeschätzt wird. In dieser Arbeit werden vier Grundprinzipien herausgearbeitet, die dieses Rechtsgebiet künftig stabilisieren sollen. Dazu gehört (i) der Schutz des steuerlichen Systems der Gewinnermittlung, (ii) die Selbstbindung der Verwaltung auch in der Sanierung des Steuerpflichtigen, (iii) das Leistungsfähigkeitsprinzip und spezielle Typisierungen in der Sanierung und (iv) der auf den Fiskus anzuwendende Gläubigergleichbehandlungsgrundsatz.<br><br><b>English Abstract:</b> The lack of formation of principles in restructuring tax law seems to be a central reason for the fact that restructuring-related tax law has been regarded as unstructured, unpredictable and restructuring-unfriendly for decades. In this article, four basic principles are elaborated which should stabilise this field of law in the future. These include (i) the protection of the tax system of profit determination, (ii) the self-obligation of the financial administration also in the restructuring of the taxpayer, (iii) the principle of efficiency and special typifications in the restructuring phase and (iv) the principle of equal treatment of creditors to be applied to the tax authorities.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131280021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We contribute to the literature on the effect of taxes on the locational choices of wealthy individuals by examining the geographical sensitivity of the Forbes 400 richest Americans to state estate taxes. Though we find billionaires’ effective tax rates are only about half the statutory rate, their residential choices are highly sensitive to these taxes, as 35 percent of local billionaires leave states with an estate tax. This tax-induced mobility causes a large reduction in the aggregate tax base. Nonetheless, we find that the revenue benefit of an estate tax exceeds the cost for the vast majority of states. (JEL H24, H31, H71, R23)
{"title":"Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy","authors":"E. Moretti, Daniel J. Wilson","doi":"10.3386/w26387","DOIUrl":"https://doi.org/10.3386/w26387","url":null,"abstract":"We contribute to the literature on the effect of taxes on the locational choices of wealthy individuals by examining the geographical sensitivity of the Forbes 400 richest Americans to state estate taxes. Though we find billionaires’ effective tax rates are only about half the statutory rate, their residential choices are highly sensitive to these taxes, as 35 percent of local billionaires leave states with an estate tax. This tax-induced mobility causes a large reduction in the aggregate tax base. Nonetheless, we find that the revenue benefit of an estate tax exceeds the cost for the vast majority of states. (JEL H24, H31, H71, R23)","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"44 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133784479","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-09-30DOI: 10.32721/ctj.2019.67.3.sym.burch
Michael Burch
The author considers the taxation of "extranational income" (income that arises outside the geographical borders of any country's national sovereignty) through the lens of Canada's experience with article 82 of the United Nations Convention on the Law of the Sea.
{"title":"Extranational Taxation: Canada and UNCLOS Article 82","authors":"Michael Burch","doi":"10.32721/ctj.2019.67.3.sym.burch","DOIUrl":"https://doi.org/10.32721/ctj.2019.67.3.sym.burch","url":null,"abstract":"The author considers the taxation of \"extranational income\" (income that arises outside the geographical borders of any country's national sovereignty) through the lens of Canada's experience with article 82 of the United Nations Convention on the Law of the Sea.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115334196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-09-30DOI: 10.32721/ctj.2019.67.3.fon
J. Lester
In this article, John Lester describes the federal tax expenditures database developed as part of the Finances of the Nation data portal. He also uses the database to analyze trends in federal tax expenditures over a 21-year period ending in 2019 and to identify the beneficiaries and the activities supported by these measures.
{"title":"Finances of the Nation: Tax Expenditures in Canada — Historical Estimates and Analysis","authors":"J. Lester","doi":"10.32721/ctj.2019.67.3.fon","DOIUrl":"https://doi.org/10.32721/ctj.2019.67.3.fon","url":null,"abstract":"In this article, John Lester describes the federal tax expenditures database developed as part of the Finances of the Nation data portal. He also uses the database to analyze trends in federal tax expenditures over a 21-year period ending in 2019 and to identify the beneficiaries and the activities supported by these measures.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121078836","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A substantial academic literature considers how agencies should interpret statutes. But few studies have considered how agencies actually do interpret statutes, and none has empirically compared the methodologies of agencies and courts in practice. This Article conducts such a comparison, using a newly created dataset of all Internal Revenue Service (IRS) publications ever released, along with an existing dataset of court decisions. It applies natural language processing, machine learning, and regression analysis to map methodological trends and to test whether particular authorities have developed unique cultures of statutory interpretation. It finds that, over time, the IRS has increasingly made rules on normative policy grounds (like fairness and efficiency) rather than merely producing rules based on the “best reading” of the relevant statute (under any interpretive theory, like purposivism or textualism). Moreover, when the IRS does focus on the statute, it has grown much more purposivist over time. In contrast, the Tax Court has not grown more normative and has followed the same trend toward textualism as most other courts. But although the Tax Court has become more broadly textualist, it prioritizes different interpretive tools than other courts, like Chevron deference and holistic-textual canons of interpretation. This suggests that each authority adopts its own flavor of textualism or purposivism. These findings complicate the literature on tax exceptionalism and the judicial nature of the Tax Court. They also inform ongoing debates about judicial deference and the future of doctrines like Chevron and Skidmore deference. Most broadly, they provide an empirical counterpoint to the existing theoretical literature on statutory interpretation by agencies.
{"title":"An Empirical Study of Statutory Interpretation in Tax Law","authors":"Jonathan H. Choi","doi":"10.2139/ssrn.3460962","DOIUrl":"https://doi.org/10.2139/ssrn.3460962","url":null,"abstract":"A substantial academic literature considers how agencies should interpret statutes. But few studies have considered how agencies actually do interpret statutes, and none has empirically compared the methodologies of agencies and courts in practice. This Article conducts such a comparison, using a newly created dataset of all Internal Revenue Service (IRS) publications ever released, along with an existing dataset of court decisions. It applies natural language processing, machine learning, and regression analysis to map methodological trends and to test whether particular authorities have developed unique cultures of statutory interpretation. \u0000 \u0000It finds that, over time, the IRS has increasingly made rules on normative policy grounds (like fairness and efficiency) rather than merely producing rules based on the “best reading” of the relevant statute (under any interpretive theory, like purposivism or textualism). Moreover, when the IRS does focus on the statute, it has grown much more purposivist over time. In contrast, the Tax Court has not grown more normative and has followed the same trend toward textualism as most other courts. But although the Tax Court has become more broadly textualist, it prioritizes different interpretive tools than other courts, like Chevron deference and holistic-textual canons of interpretation. This suggests that each authority adopts its own flavor of textualism or purposivism. \u0000 \u0000These findings complicate the literature on tax exceptionalism and the judicial nature of the Tax Court. They also inform ongoing debates about judicial deference and the future of doctrines like Chevron and Skidmore deference. Most broadly, they provide an empirical counterpoint to the existing theoretical literature on statutory interpretation by agencies.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121855992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The general anti-avoidance rules have been introduced in the Indian direct tax landscape recently. It will be some years before the judicial examination of the provisions and their interpretation by the courts are available as guidance to the taxpayers and the administrators. In this scenario, a scan of the legal provisions with countries with codified GAAR may provide some insights into how the provisions will eventually be interpreted by the courts. Though this is not an attempt to do a comprehensive comparison of the GAAR of various countries, this discussion aims to touch upon the significant areas and hopefully provide to the reader some straws in the wind about how the Indian GAAR provisions will be understood in the future.
{"title":"Foreign Jurisprudence on Gaars and Their Relevance to India","authors":"Ganesh Rajgopalan","doi":"10.2139/ssrn.3444140","DOIUrl":"https://doi.org/10.2139/ssrn.3444140","url":null,"abstract":"The general anti-avoidance rules have been introduced in the Indian direct tax landscape recently. It will be some years before the judicial examination of the provisions and their interpretation by the courts are available as guidance to the taxpayers and the administrators. In this scenario, a scan of the legal provisions with countries with codified GAAR may provide some insights into how the provisions will eventually be interpreted by the courts. Though this is not an attempt to do a comprehensive comparison of the GAAR of various countries, this discussion aims to touch upon the significant areas and hopefully provide to the reader some straws in the wind about how the Indian GAAR provisions will be understood in the future.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"34 12","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"113974199","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ongoing globalization and increased taxpayer mobility not only exacerbate already existing shortcomings when allocating taxing rights but also legal mismatches in regard of access to welfare benefits and voting rights. All three legal areas (taxation, access to welfare benefits and voting rights) are of importance for those individuals who choose to cross-border work or relocate themselves to another state on a more permanent basis. The extent of this importance will, naturally, vary between taxpayer groups due to individual circumstances and needs. Yet some more general deductions may still be made.
This paper identifies and analyses, through a traditional legal study, legal mismatches between taxation, access to welfare benefits and voting rights in Sweden. These three legal areas are analysed through the application of a taxpayer case study consisting of six classical taxpayer groups commonly found within international taxation. The result of the study illustrates that there are apparent mismatches between taxpayer groups, some more comprehensible than others.
In conclusion, mobile individuals may as a result of disparities between tax allocation, formal citizenship and voting privileges contribute financially to a state yet not having the possibility to exercise influence over their tax situation due to the lack of formal citizenship and voting privileges in said state. The group who may influence taxation and public spending (tax and spend) through voting is therefore not always the same as those who pay taxes. This issue is naturally complex as the group of individuals excluded from such political influence is a highly diverse one, reaching from high-net individuals to state-less persons seeking asylum, subject to individual circumstances and needs. The paper in itself form part of a larger body of work, done under the umbrella of Political (Tax) equity in a global context, in which I explore how increased taxpayer mobility challenges not only traditional legal frameworks associated to taxation but also the allocation of political rights and benefits. The traditional perception of citizenship as the basis for voting rights is, as is illustrated through various publications linked to the project, found inadequate when dealing with mobile taxpayers.
{"title":"Voting Rights Compared to Income Taxation and Welfare Benefits Through the Swedish Lens","authors":"Yvette Lind","doi":"10.5744/ftr.2020.2009","DOIUrl":"https://doi.org/10.5744/ftr.2020.2009","url":null,"abstract":"Ongoing globalization and increased taxpayer mobility not only exacerbate already existing shortcomings when allocating taxing rights but also legal mismatches in regard of access to welfare benefits and voting rights. All three legal areas (taxation, access to welfare benefits and voting rights) are of importance for those individuals who choose to cross-border work or relocate themselves to another state on a more permanent basis. The extent of this importance will, naturally, vary between taxpayer groups due to individual circumstances and needs. Yet some more general deductions may still be made. <br><br>This paper identifies and analyses, through a traditional legal study, legal mismatches between taxation, access to welfare benefits and voting rights in Sweden. These three legal areas are analysed through the application of a taxpayer case study consisting of six classical taxpayer groups commonly found within international taxation. The result of the study illustrates that there are apparent mismatches between taxpayer groups, some more comprehensible than others. <br><br>In conclusion, mobile individuals may as a result of disparities between tax allocation, formal citizenship and voting privileges contribute financially to a state yet not having the possibility to exercise influence over their tax situation due to the lack of formal citizenship and voting privileges in said state. The group who may influence taxation and public spending (tax and spend) through voting is therefore not always the same as those who pay taxes. This issue is naturally complex as the group of individuals excluded from such political influence is a highly diverse one, reaching from high-net individuals to state-less persons seeking asylum, subject to individual circumstances and needs. The paper in itself form part of a larger body of work, done under the umbrella of Political (Tax) equity in a global context, in which I explore how increased taxpayer mobility challenges not only traditional legal frameworks associated to taxation but also the allocation of political rights and benefits. The traditional perception of citizenship as the basis for voting rights is, as is illustrated through various publications linked to the project, found inadequate when dealing with mobile taxpayers.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130680034","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Elisa Casi-Eberhard, Christoph Spengel, Barbara Stage
Back in 2013, the Automatic Exchange of Information (AEOI) was endorsed as the prevailing universal solution to fight cross-border tax evasion. In this regard, the OECD launched a global standard for the AEOI, the Common Reporting Standard (CRS). Currently, around 100 jurisdictions have committed to implement it into respective national laws by 2018. In this study, we analyze the impact of the CRS on cross-border tax evasion using a difference-in-difference research design. By considering a period of four years (2014-2017), results suggest that the CRS induced a reduction of 14% in cross-border deposits parked in offshore locations for tax evasion purposes. Moreover, such wealth and related income has not been repatriated but rather a new location to avoid domestic tax obligations has emerged. More specifically, upon the CRS implementation at domestic level, the United States (U.S.), i.e. the only major economy in the world, which so far did not commit to the CRS, seems to emerge as a potentially attractive location for cross-border tax evasion.
{"title":"Cross-Border Tax Evasion after the Common Reporting Standard: Game Over?","authors":"Elisa Casi-Eberhard, Christoph Spengel, Barbara Stage","doi":"10.2139/ssrn.3245144","DOIUrl":"https://doi.org/10.2139/ssrn.3245144","url":null,"abstract":"Back in 2013, the Automatic Exchange of Information (AEOI) was endorsed as the prevailing universal solution to fight cross-border tax evasion. In this regard, the OECD launched a global standard for the AEOI, the Common Reporting Standard (CRS). Currently, around 100 jurisdictions have committed to implement it into respective national laws by 2018. In this study, we analyze the impact of the CRS on cross-border tax evasion using a difference-in-difference research design. By considering a period of four years (2014-2017), results suggest that the CRS induced a reduction of 14% in cross-border deposits parked in offshore locations for tax evasion purposes. Moreover, such wealth and related income has not been repatriated but rather a new location to avoid domestic tax obligations has emerged. More specifically, upon the CRS implementation at domestic level, the United States (U.S.), i.e. the only major economy in the world, which so far did not commit to the CRS, seems to emerge as a potentially attractive location for cross-border tax evasion.","PeriodicalId":330166,"journal":{"name":"Law & Society: Public Law - Tax eJournal","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130988172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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