IDEAS home Printed from https://ideas.repec.org/p/oec/ctpaaa/46-en.html
   My bibliography  Save this paper

Exchange of information and bank deposits in international financial centres

Author

Listed:
  • Pierce O’Reilly
  • Kevin Parra Ramirez
  • Michael A. Stemmer

Abstract

This paper assesses the impact of exchange of information on foreign-owned bank deposits in international financial centres (IFCs). Based on a dataset with extended jurisdiction coverage and sample length, foreign-owned IFC deposits declined globally by 24% or USD 410 billion during the period from 2008 to 2019. The commencement of automatic exchange of information is associated on average with a statistically significant 22% reduction in IFC bank deposits held by non-IFC counterparty jurisdictions. The results show that exchange of information on request was associated with a reduction of around 10% during the early years of implementation. Robustness checks show that voluntary disclosure programmes do not drive the results. These findings highlight the effectiveness of the expansion of automatic exchange of informationand provide further evidence of the success of a comprehensive multilateral approach towards international tax transparency.

Suggested Citation

  • Pierce O’Reilly & Kevin Parra Ramirez & Michael A. Stemmer, 2019. "Exchange of information and bank deposits in international financial centres," OECD Taxation Working Papers 46, OECD Publishing.
    • Handle: RePEc:oec:ctpaaa:46-en
    DOI: 10.1787/025bfebe-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/025bfebe-en
    Download Restriction: no
    File URL: https://libkey.io/10.1787/025bfebe-en?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Menkhoff, Lukas & Miethe, Jakob, 2019. "Tax evasion in new disguise? Examining tax havens' international bank deposits," Journal of Public Economics, Elsevier, vol. 176(C), pages 53-78.
    2. Huizinga, Harry & Nicodeme, Gaetan, 2004. "Are international deposits tax-driven," Journal of Public Economics, Elsevier, vol. 88(6), pages 1093-1118, June.
    3. David M. Kemme & Bhavik Parikh & Tanja Steigner, 2017. "Tax Havens, Tax Evasion and Tax Information Exchange Agreements in the OECD," European Financial Management, European Financial Management Association, vol. 23(3), pages 519-542, June.
    4. Alstadsæter, Annette & Johannesen, Niels & Zucman, Gabriel, 2018. "Who owns the wealth in tax havens? Macro evidence and implications for global inequality," Journal of Public Economics, Elsevier, vol. 162(C), pages 89-100.
    5. Jan Fichtner, 2016. "The anatomy of the Cayman Islands offshore financial center: Anglo-America, Japan, and the role of hedge funds," Review of International Political Economy, Taylor & Francis Journals, vol. 23(6), pages 1034-1063, November.
    6. Katarzyna Bilicka & Clemens Fuest, 2014. "With which countries do tax havens share information?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(2), pages 175-197, April.
    7. Michelle Hanlon & Edward L. Maydew & Jacob R. Thornock, 2015. "Taking the Long Way Home: U.S. Tax Evasion and Offshore Investments in U.S. Equity and Debt Markets," Journal of Finance, American Finance Association, vol. 70(1), pages 257-287, February.
    8. Casi, Elisa & Spengel, Christoph & Stage, Barbara M.B., 2020. "Cross-border tax evasion after the common reporting standard: Game over?," Journal of Public Economics, Elsevier, vol. 190(C).
    9. Langenmayr, Dominika, 2017. "Voluntary disclosure of evaded taxes — Increasing revenue, or increasing incentives to evade?," Journal of Public Economics, Elsevier, vol. 151(C), pages 110-125.
    10. Niels Johannesen & Gabriel Zucman, 2014. "The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 65-91, February.
    11. Jost H. Heckemeyer & Aaron K. Hemmerich, 2020. "Information Exchange and Tax Haven Investment in OECD Securities Markets," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(2), pages 291-330, June.
    12. Gabriel Zucman, 2013. "The Missing Wealth of Nations: Are Europe and the U.S. net Debtors or net Creditors?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1321-1364.
    13. Menkhoff, Lukas & Miethe, Jakob, 2019. "Tax evasion in new disguise? Examining tax havens' international bank deposits," Journal of Public Economics, Elsevier, vol. 176(C), pages 53-78.
    14. Sebastian Beer & Maria Delgado Coelho & Sebastien Leduc, 2019. "Hidden Treasure: The Impact of Automatic Exchange of Information on Cross-Border Tax Evasion," IMF Working Papers 2019/286, International Monetary Fund.
    15. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    16. Pierce O’Reilly & Kevin Parra Ramírez & Michael A. Stemmer, 2021. "Exchange of Information and Bank Deposits in International Financial Centres," Hacienda Pública Española / Review of Public Economics, IEF, vol. 239(4), pages 27-69, November.
    17. repec:hal:pseose:halshs-01053616 is not listed on IDEAS
    18. De Simone, Lisa & Lester, Rebecca & Markle, Kevin, 2019. "Transparency and Tax Evasion: Evidence from the Foreign Account Tax Compliance Act (FATCA)," Research Papers 3744, Stanford University, Graduate School of Business.
    19. Valeria Pellegrini & Alessandra Sanelli & Enrico Tosti, 2016. "What do external statistics tell us about undeclared assets held abroad and tax evasion?," Questioni di Economia e Finanza (Occasional Papers) 367, Bank of Italy, Economic Research and International Relations Area.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paolo Acciari & Facundo Alvaredo & Salvatore Morelli, 2024. "The Concentration of Personal Wealth in Italy 1995–2016," Journal of the European Economic Association, European Economic Association, vol. 22(3), pages 1228-1274.
    2. Niels Johannesen & Daniel Reck & Max Risch & Joel Slemrod & John Guyton & Patrick Langetieg, 2024. "The Offshore World According to FATCA: New Evidence on the Foreign Wealth of US Households," Tax Policy and the Economy, University of Chicago Press, vol. 38(1), pages 61-99.
    3. Arun Advani & Hannah Tarrant, 2021. "Behavioural responses to a wealth tax," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 509-537, September.
    4. Jeanne Bomare & Ségal Le Guern Herry, 2022. "Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK," SciencePo Working papers Main hal-03811306, HAL.
    5. Ludger Schuknecht & Vincent Siegerink, 2021. "The Political Economy of the International Tax Transparency Agenda in the G20/OECD Context," CESifo Working Paper Series 8813, CESifo.
    6. Petr Janský & Markus Meinzer & Miroslav Palanský, 2022. "Is Panama really your tax haven? Secrecy jurisdictions and the countries they harm," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 673-704, July.
    7. Pierce O’Reilly & Kevin Parra Ramírez & Michael A. Stemmer, 2021. "Exchange of Information and Bank Deposits in International Financial Centres," Hacienda Pública Española / Review of Public Economics, IEF, vol. 239(4), pages 27-69, November.
    8. César Pérez López & María Jesús Delgado Rodríguez & Sonia de Lucas Santos, 2023. "Modelización de los factores que afectan al fraude fiscal con técnicas de minería de datos: aplicación al Impuesto de la Renta en España," Hacienda Pública Española / Review of Public Economics, IEF, vol. 246(3), pages 137-164, September.
    9. Matthew Collin & Florian M. Hollenbach & David Szakonyi, 2023. "The end of Londongrad? The impact of beneficial ownership transparency on offshore investment in UK property," WIDER Working Paper Series wp-2023-11, World Institute for Development Economic Research (UNU-WIDER).
    10. Alstadsæter, Annette & Casi, Elisa & Miethe, Jakob & Stage, Barbara M. B., 2023. "Lost in Information: National Implementation of Global Tax Agreements," Discussion Papers 2023/22, Norwegian School of Economics, Department of Business and Management Science, revised 27 Sep 2024.
    11. Sarah Perret, 2021. "Why were most wealth taxes abandoned and is this time different?," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 539-563, September.
    12. Jeanne Bomare & Ségal Le Guern Herry, 2022. "Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK," Working Papers hal-03811306, HAL.
    13. Jeanne Bomare & Ségal Le Guern Herry, 2022. "Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK," SciencePo Working papers hal-03811306, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Langenmayr, Dominika & Zyska, Lennard, 2023. "Escaping the exchange of information: Tax evasion via citizenship-by-investment," Journal of Public Economics, Elsevier, vol. 221(C).
    2. Leo Ahrens & Lukas Hakelberg & Thomas Rixen, 2022. "A victim of regulatory arbitrage? Automatic exchange of information and the use of golden visas and corporate shells," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 653-672, July.
    3. Dominika Langenmayr & Lennard Zyska, 2021. "Avoiding Taxes: Escaping the Exchange of Information: Tax Evasion via Citizenship-by-Investment," Working Papers 204, Bavarian Graduate Program in Economics (BGPE).
    4. Menkhoff, Lukas & Miethe, Jakob, 2019. "Tax evasion in new disguise? Examining tax havens' international bank deposits," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 176, pages 53-78.
    5. Arun Advani & Hannah Tarrant, 2021. "Behavioural responses to a wealth tax," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 509-537, September.
    6. Jeanne Bomare & Ségal Le Guern Herry, 2022. "Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK," Working Papers hal-03811306, HAL.
    7. Casi, Elisa & Spengel, Christoph & Stage, Barbara M.B., 2020. "Cross-border tax evasion after the common reporting standard: Game over?," Journal of Public Economics, Elsevier, vol. 190(C).
    8. D’Avino, Carmela, 2023. "Counteracting offshore tax evasion: Evidence from the foreign account tax compliance act," International Review of Law and Economics, Elsevier, vol. 73(C).
    9. Jeanne Bomare & Ségal Le Guern Herry, 2022. "Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK," SciencePo Working papers hal-03811306, HAL.
    10. Jeanne Bomare & Ségal Le Guern Herry, 2022. "Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK," SciencePo Working papers Main hal-03811306, HAL.
    11. Hoang Ha Nguyen Thi & Alfons Weichenrieder, 2023. "Tax Haven Welfare and the Crackdown on Secrecy: Evidence from Night Light Emissions," CESifo Working Paper Series 10721, CESifo.
    12. Casi, Elisa & Nenadic, Sara & Orlic, Mark Dinko & Spengel, Christoph, 2019. "A call to action: From evolution to revolution on the Common Reporting Standard," ZEW Discussion Papers 18-035, ZEW - Leibniz Centre for European Economic Research, revised 2019.
    13. Ludger Schuknecht & Vincent Siegerink, 2021. "The Political Economy of the International Tax Transparency Agenda in the G20/OECD Context," CESifo Working Paper Series 8813, CESifo.
    14. Niels Johannesen & Patrick Langetieg & Daniel Reck & Max Risch & Joel Slemrod, 2020. "Taxing Hidden Wealth: The Consequences of US Enforcement Initiatives on Evasive Foreign Accounts," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 312-346, August.
    15. Agustín Bénétrix & Lorenz Emter & Martin Schmitz, 2024. "Automatic for the (tax) people: information sharing and cross-border investment in tax havens," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 39(120), pages 853-895.
    16. Niels Johannesen & Daniel Reck & Max Risch & Joel Slemrod & John Guyton & Patrick Langetieg, 2024. "The Offshore World According to FATCA: New Evidence on the Foreign Wealth of US Households," Tax Policy and the Economy, University of Chicago Press, vol. 38(1), pages 61-99.
    17. Casi, Elisa & Mardan, Mohammed & Stage, Barbara M. B., 2023. "Citizenship/Residence by Investment and Digital Nomad Visas: The Golden Era of Individual Tax Evasion and Avoidance?," Discussion Papers 2023/12, Norwegian School of Economics, Department of Business and Management Science.
    18. Becker, Johannes & Wilson, John D., 2023. "Tax competition with two tax instruments — and tax base erosion," Journal of Public Economics, Elsevier, vol. 225(C).
    19. Elisa Casi & Mohammed Mardan & Rohit Reddy Muddasani, 2022. "So close and yet so far: the ability of mandatory disclosure rules to crack down on offshore tax evasion," WIDER Working Paper Series wp-2022-116, World Institute for Development Economic Research (UNU-WIDER).
    20. Paolo Acciari & Facundo Alvaredo & Salvatore Morelli, 2024. "The Concentration of Personal Wealth in Italy 1995–2016," Journal of the European Economic Association, European Economic Association, vol. 22(3), pages 1228-1274.

    More about this item

    Keywords

    cross-border bank deposits; exchange of information; offshore finance; tax evasion;
    All these keywords.

    JEL classification:

    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:ctpaaa:46-en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ctoecfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.