The end of bank secrecy? An evaluation of the G20 tax haven crackdown

During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, our study is the first attempt to assess how the treaties affected bank deposits in tax havens. Rather than repatriating funds, our results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country. The crackdown thus caused a relocation of deposits at the benefit of the least compliant havens. We discuss the policy implications of these findings

Taxation and the financial crisis

The financial crisis has opened up a global debate on the taxation of the financial sector. A number of international policy initiatives, most notably by the G20, have called for major changes in the tax treatment of financial institutions and transactions as well as individuals working in the financial sector. This book examines how tax policies contributed to the financial crisis and whether taxation can play a role in the reform efforts under way to establish a sounder and safer financial system. The book looks at the pros and cons of various tax initiatives, including limiting the tax advantages to debt financing, special taxes on the financial sector and financial transactions taxes.</p

Taxation and the financial crisis

The financial crisis has opened up a global debate on the taxation of the financial sector. A number of international policy initiatives, most notably by the G20, have called for major changes in the tax treatment of financial institutions and transactions as well as individuals working in the financial sector. This book examines how tax policies contributed to the financial crisis and whether taxation can play a role in the reform efforts under way to establish a sounder and safer financial system. The book looks at the pros and cons of various tax initiatives, including limiting the tax advantages to debt financing, special taxes on the financial sector and financial transactions taxes.Copyright 2012 Oxford University Press. Chapter 3 & 5 copyright 2012 European Union. Chapter 9 copyright 2009 Bank for International Settlements. This publication is available as an open access version through OUP, as part of the OAPEN-UK project. Re-use of this article is permitted in accordance with the Terms and Conditions set out at http://creativecommons.org/licenses/by-nc-nd/3.0

Taxes and Corporate Financing Decisions Evidence from the Belgian Ace Reform

We contribute to the empirical literature on the debt bias of corporate income taxation through a micro-econometric evaluation of the so-called ACE corporate tax reform in Belgium based on firm-level accounting data. We interpret the tax reform that came into effect in January 2006 as an economic quasi experiment. We identify its causal impact on the leverage ratio of Belgian corporations by means of a difference-in-differences (DiD) approach, using corporations from the UK as comparison group. Our results document that the ACE reform led to a systematic pattern of heterogeneous effects on the capital structure of Belgian corporations, as the estimated reduction of the leverage ratio is most pronounced for big firms. Estimation of quantile treatment effects further reveals that reform effects get monotonically larger across the distribution of firm leverage. Finally, we provide evidence of sectoral heterogeneity with significant effects observed for capital-intensive, but not for labor-intensive sectors.Klassische Systeme der Unternehmensbesteuerung verzerren die Finanzierungsentscheidung von Unternehmen ('Debt Bias'): Weil Zinsen für Fremdkapital von der Steuerbasis abgezogen werden können, die (Opportunitäts) Kosten für Eigenkapital jedoch nicht, gibt das Steuersystem den Unternehmen einen Anreiz für höhere Verschuldung. Diese Verzerrung kann mithilfe einer zinsbereinigten Gewinnsteuer überwunden werden, welche kalkulatorische Kosten für das Eigenkapital ebenfalls steuerabzugsfähig macht. Das Paper evaluiert die Einführung einer derartigen Reform in Belgien im Jahr 2006 auf der Basis von Bilanzdaten der betroffenen Firmen. Mithilfe eines Differenz-von-Differenzen-Ansatzes wird der Effekt der Reform auf den Verschuldungsgrad belgischer Unternehmen identifiziert, wobei Unternehmen aus Großbritannien die Vergleichsgruppe bilden. Es zeigt sich ein systematisches Muster heterogener Reformeffekte: Einerseits ist der Rückgang des Verschuldungsgrads für Großunternehmen am stärksten ausgeprägt. Quantilseffektschätzungen weisen zudem darauf hin, dass jene Unternehmen am stärksten auf die Reform reagieren, die zuvor einen überdurchschnittlich hohen Verschuldungsgrad aufgewiesen haben. Sektor-spezifische Schätzungen zeigen schließlich, dass signifikante Reformeffekte vor allem in kapital- aber nicht in arbeitsintensiven Wirtschaftszweigen auftreten