The Compliance Effects of the Automatic Exchange of Information: Evidence from the Swiss Tax Amnesty

Enea Baselgia ()
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Enea Baselgia: University of St. Gallen

No 19, Working Papers from EU Tax Observatory

Abstract: This paper studies how the introduction of multilateral automatic exchange of information (AEOI) in 2017 affects tax compliance. Exploiting rich tax data, variation generated by the interplay of the Swiss tax amnesty with the AEOI, and difference-in-differences designs, I document substantial compliance responses. At the macro level, about 107k taxpayers (2% of all) were pushed to participate in amnesty by the AEOI. Together, they disclosed around 35.2 billion Swiss francs in hidden assets—more than 5% of GDP. I show that the behavioral compliance responses persists at the micro level. Once a tax evader enters the amnesty, their wealth on average increases by 50% and remains at this higher level in subsequent years (relative to the control group). Lastly, I provide evidence that tax evasion is widespread and more evenly distributed in Switzerland than in other European countries—which is consistent with Switzerland’s lack of third-party reporting prior to the AEOI.

Keywords: Tax evasion; AEOI; compliance; enforcement; CRS; tax amnesty; inequality (search for similar items in EconPapers)
JEL-codes: D31 F38 F42 H24 H26 K34 K42 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2023-06
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