Does Exchange of Information between Tax Authorities Influence Multinationals' Use of Tax Havens?

Publication: Working/Discussion PaperWU Working Paper

Abstract

Since the mid-1990s, countries offering tax systems that facilitate international
tax avoidance and evasion have been facing growing political pressure to comply
with the internationally agreed standards of exchange of tax information. Using
data of German investments in tax havens, we find evidence that the conclusion
of a bilateral tax information exchange agreement (TIEA) is associated with
fewer operations in tax havens and the number of German affiliates has on
average decreased by 46% compared to a control group. This suggests that firms
invest in tax havens not only for their low tax rates but also for the secrecy they
offer. (authors' abstract)
Original languageEnglish
Place of PublicationVienna
PublisherWU Vienna University of Economics and Business
Publication statusPublished - 23 Feb 2015

Publication series

NameWU International Taxation Research Paper Series
No.2015-11

WU Working Paper Series

  • WU International Taxation Research Paper Series

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