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

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  • Carmela D’avino

    (ESC Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business)

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 Using an unpublished dataset on deposits held by branches of US banks on a geographically unconsolidated basis, we find that the FATCA led to a reduction in deposits held in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

  • Carmela D’avino, 2023. "Counteracting offshore tax evasion: Evidence from the foreign account tax compliance act," Post-Print hal-03980948, HAL.
    • Handle: RePEc:hal:journl:hal-03980948
    DOI: 10.1016/j.irle.2023.106126
    Note: View the original document on HAL open archive server: https://rennes-sb.hal.science/hal-03980948v1
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    References listed on IDEAS

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    1. Gabriel Zucman, 2014. "Taxing across Borders: Tracking Personal Wealth and Corporate Profits," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 121-148, Fall.
    2. Arbel, Yonathan A., 2016. "Shielding of assets and lending contracts," International Review of Law and Economics, Elsevier, vol. 48(C), pages 26-35.
    3. Katarzyna Bilicka & Clemens Fuest, 2014. "With which countries do tax havens share information?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(2), pages 175-197, April.
    4. Graetz, Michael & Wilde, Louis, 1993. "The decision by strategic nonfilers to participate in income tax amnesties," International Review of Law and Economics, Elsevier, vol. 13(3), pages 271-283, September.
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