A Journey from a Corruption Port to a Tax Haven

Shafik Hebous and Vilen Lipatov

No 1204, Working Papers from Oxford University Centre for Business Taxation

Abstract: We sketch a model according to which tax havens attract corporate income generated in corrupted countries. We consider the choice of optimal bribes by corrupt o¢ cials and the share of the proceeds of corruption that will be concealed in tax havens. In our framework, tax havens have two opposite e¤ects on welfare. First, tax havens?services have a positive e¤ect on welfare through encouraging investment by ?rms fearing expropriation and bribes in corrupt countries. Second, by supporting corruption and the concealment of o¢ cials?bribes, tax havens discourage the provision of public goods and hence have also a negative e¤ect on welfare. The net welfare e¤ect depends on the speci?ed preferences and parameters. One source of this ambiguity is that the presence of multinational ?rms in corrupted countries is positively associated with demanding tax havens?operations. Using fi?rm-level data, we provide empirical support for this hypothesis.

Keywords: Tax Havens; Tax Avoidance; Tax Evasion; Multinational Firms; Corruption (search for similar items in EconPapers)
JEL-codes: F23 H25 H32 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-iue and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/WP1204.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/WP1204.pdf [301 Moved Permanently]--> https://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/WP1204.pdf)

Related works:
Journal Article: A journey from a corruption port to a tax haven (2014)
Working Paper: A Journey from a Corruption Port to a Tax Haven (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:btx:wpaper:1204

Access Statistics for this paper

More papers in Working Papers from Oxford University Centre for Business Taxation Contact information at EDIRC.
Bibliographic data for series maintained by Dongxian Guo ( this e-mail address is bad, please contact ).