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Counteracting offshore tax evasion: Evidence from the foreign account tax compliance act

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  • D’Avino, Carmela

Abstract

This paper aims to investigate the effect of the Foreign Account Tax Compliance Act (FATCA) on the deposits held by US global banks through their branches located around the world. Using an unpublished dataset on deposits held by branches of US banks on a geographically unconsolidated basis, we find that the FATCA led to a reduction in deposits held in branches located in tax havens. We find that this effect is more severe in those jurisdictions signing a reciprocal exchange of information agreement. We also advance evidence in support of deposit shifting within the US banking system towards locations without a reciprocal intergovernmental agreement.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:irlaec:v:73:y:2023:i:c:s0144818823000042
    DOI: 10.1016/j.irle.2023.106126
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    More about this item

    Keywords

    G21; G28; H26; H87;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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