Automatic for the (tax) people: information sharing and cross-border investment in tax havens

Agust n B n trix (), Lorenz Emter and Martin Schmitz
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Agust n B n trix: IMTCD, Department of Economics, Trinity College Dublin
Authors registered in the RePEc Author Service: Agustín S. Bénétrix

Economic Papers from Trinity College Dublin, Economics Department

Abstract: This paper examines the impact of international automatic exchange of information (AEOI) treaties on cross-border investments in tax havens. Using a restricted version of the BIS Locational Banking Statistics we find that AEOIs significantly reduced cross-border deposits. A sectoral breakdown assessment reveals that households were the key driving force behind this contraction. Analysing other forms of cross-border investment, we observe that tax havens' portfolio and direct investment assets in non-haven countries fell significantly after AEOI introduction, indicating a reduction of round-tripping investments. However, we also document evidence of households' deposits shifting to non-AEOI haven countries. Moreover, we observe larger FDI positions and deposits by non-bank financial institutions between tax haven countries, suggesting an increased use of shell corporation networks since AEOI introduction.

Keywords: cross-border banking; tax havens; international tax treaties; tax evasion (search for similar items in EconPapers)
JEL-codes: G21 G28 H26 H87 K34 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2021-11
New Economics Papers: this item is included in nep-ban, nep-int and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Automatic for the (tax) people: information sharing and cross-border investment in tax havens* (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:tep1321

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