Fiscal Havens: Just a Matter of Harmful Tax Competition? A Literature Review Camilla FIORINA M2 IMPF – 2019/2020 Index INDEX 2 1. INTRODUCTION 3 2. TAX HAVENS 4 2.1 Definitions and formal lists of Tax Havens 4 2.3 Determinants of Tax Havens 5 3. WHO ARE THE USERS OF TAX HAVENS? 6 3.1 Multinational companies and tax avoidance 7 3.2 Methods of avoidance and evasion by individuals 9 4. TAX HAVENS AND ECONOMIC GROWTH 10 4.1 Economic growth in tax havens 11 4.2 The impact of preferential tax regimes in developed countries 11 4.3 The impact of preferential tax regimes in developing countries 12 5. CONCLUSIONS 13 6. REFERENCES 14 6.1 Main references 6.2 Other empirical evidences 14 14 2 1. Introduction In recent years tax havens have earned a place of honor at the center of international scandals and controversies, so much so that they are now very familiar terms even to non-economists. The growing integration of the financial markets and the development of new technologies that have made capital mobility faster and more convenient have allowed the proliferation of these financial realities. Their huge success, and the disproportionate amount of international capital that is drawn into their financial systems, have attracted the attention of scholars and policymakers, mainly because of the concern that the success of tax havens occurs at the expense of non-havens, in particular through the erosion of the tax base of the latter. Also, thanks to their policy of bank secrecy, they could potentially be the home to many illegal activities. The international interest in tax havens becomes a collective reaction in 1998 when the OECD introduces for the first time what is now known as its Harmful Tax Practices initiative. The objective was to “develop measures to counter the distorting effects of harmful tax competition on investment and financing decisions and the consequences for national tax bases” (OECD, 1998). The initiative criticized some of the most important features of tax havens, namely the use of preferential tax regimes that offer very low tax rates exclusively to non-residents and the limited availability to exchange financial information with the rest of countries. To discourage countries from making use of policies which enhance harmful tax competition, the OECD tracked down all the countries which were considered to be tax havens and created a “black-list” of those which didn’t agree to commit to exchange information. This list, which in 2000 included 35 jurisdiction, is updated every time a country agrees to cooperate and in 2015 it only counted 3 countries: Andorra, Lichtenstein and Monaco (Gravelle, 2015). Although this may seem to indicate a progress in the fight against tax havens, evidence do not show a reduction in their activity. On the contrary, they continue to attract huge flows of foreign capital undisturbed. The aim of this literature review is to provide a general overview, yet quite comprehensive, of the controversial reality of tax havens. The work is structured as follows: session 2 serves as an introduction to the general concept of tax havens. Session 3 provides some insights about how multinational corporations and wealthy individuals make use of tax havens most of the time to, respectively, avoid and evade taxes. Findings are supported with empirical evidence. Session 4 reports the different points of view of scholars about the impact of tax havens on world’s economic growth. Session 5 concludes. 3 2. Tax havens 2.1 Definitions and formal lists of Tax Havens International regimes, intended as the set of rules and governance structures established together by nation states, have always helped to maintain and preserve the delicate balances between countries, and to manage their conflicts. With the arise of globalization and spread of multinational enterprises, international tax regimes have been established, to manage the complex issue of taxation of income produced by multinational corporations worldwide. In this context, the Organization for the Economic Development and Cooperation (OECD) considers tax havens as “renegade states”, intended as countries whose “tax practices are salient to the regime but whose behavior does not comply with the regime’s descriptive norms and practices”, thus weakening regime effectiveness (Eden & Kurdle (2005)). In 1998, in its report “Harmful Tax Competition: An Emerging Global Issue”, the OECD provided some practical guidelines for helping the governments to identify tax havens and came up with the key factors which characterize tax havens: 1. No or only nominal taxes 2. Lack of effective exchange of information 3. Lack of transparency 4. The absence of a requirement that the activity needs to be substantial As reported by Hines (2010) scholars generally agree on the fact that tax havens are countries and territories that offer low tax rates and favorable regulatory policies to foreign investors. On the other hand, the relative importance of the other features strictly depends on the context. Some authors have tried to include them in their definition of tax havens. For example, Eden & Kurdle (2005) claim that tax havens can be grouped according to the type of taxation and financial services offered and according to the type of activities which are privileged. For example, when low tax rates attract capital which induces changes in the real added value of the tax haven, they can be categorized as production haven – for example Ireland. On the other hand, when tax havens specifically design taxes rates to induce firms to incorporate in their jurisdictions, regardless of the physical location of shareholders, are called headquarters haven – as Belgium and Singapore. To conclude, sham havens – group which includes most of Caribbean and Pacific tax havens, Switzerland, Luxembourg and Austria – serve as headquarters havens but offer also high secrecy and specialize in allowing personal income-tax evasion. However, boundaries of these categorizations are quite fuzzy and variable over time, especially due to some efforts by OECD and national governments to fight bank secrecy. Because of the lack of an agreed-upon definition of tax havens, many different lists have been formulated by scholars and institutions over time. 4 The OCED created an initial list of tax havens in 2000 which changed much over the years. However, the list did not include some low-tax member of the OECD, as Ireland, Switzerland and Luxembourg. Moreover, it created a “black-list” of those which didn’t agree to commit to exchange information. Currently, the OECD divides countries in three lists: a white list of countries implementing an agreedupon standard, a gray list of countries that have committed to such a standard, and a black list of countries that have not committed. However the lists of the OECD can sometimes be biased by some political pressure. The Tax Justice Network proposes a very large list of tax havens, including some specific cities and areas, as New York, the City of London, Trieste and many others. However, not everyone agrees on this categorization. Hines (2010) proposes a quite comprehensive list of 52 jurisdictions which can be recognized as tax havens, based on their low business tax rates, the self-promotion as financial centers and whether they were included in the list of other authorities sources, as other scholars, national governments or international organization as the OECD. Table 1 – List of Tax Havens 2.3 Determinants of Tax Havens By looking at the list proposed by Hines (2010), it immediately stands out that the countries and territories included in the list are not randomly distributed but share some common characteristics. Dharmapala and Hines (2009) empirically investigate what are the determinants of becoming or not a tax haven. From their work it emerges that tax havens are generally small countries (or territories) with the population not exceeding one million. This happens because small jurisdictions can only be pricetaker when it comes to international tax competition, meaning that any of their tax burden cannot 5 be shifted to foreign investors, but will be borne by domestic factors of production. For this reason, domestic residents will benefit from eliminating taxes on foreign capital and directly taxing local production. Moreover, they tend to be more affluent than non-havens and have quite open economies, close to major exporters of capital, also in terms of time-zone. They are less likely to be landlocked and more likely to be islands; this could be related to the higher ability of islands to attract tourists, thereby capital. They tend to be common law and English speaking countries, and to have parliamentary system. Compared to similar non-haven countries, they are in average less endowed in natural resources, better equipped with infrastructures and have a significant advantage in quality of governance. Finally, the majority of tax havens are dependent jurisdictions with autonomous legal and tax systems. While most of these features were widely recognized by the previous literature, the fundamental contribution of these authors is to stress the extreme importance of the quality of governance in determining the tax haven status. When regressing the probability of being a tax haven against an index of quality of government including measures of voice and accountability, political stability, government effectiveness, rule of law, and the control of corruption – obtained coefficient is positive and statistically significant, and results are robust to several checks and control variables. Their well-known result is that, for a small country with population below 1 million, increasing governance from 0 to 1 – as it would be when increasing governance quality from the one of Brasil to that of Portugal – the probability of becoming a tax haven increases from 26% to 61%. A possible explanation to this phenomenon is that countries need to be credible in their promise to foreign investors to keep low tax rates, if they want to attract capital. Country with poor governance will not be able to maintain their credibility and thus will not attract enough foreign investment to benefit from the lowering of rates. This could also explain while, in spite of the high growth rates that characterizes the economies of tax havens, not all countries, especially developing ones, attempt at being recognized as tax havens. One notable example is Africa which has almost no tax havens and presents, indeed, the lowest governance indexes of the world on average. 3. Who are the users of Tax Havens? Tax havens process very large volume of foreign capital transactions. There are three main categories of cross-border transactions: direct investment, portfolio securities, and other assets. A direct investment is an investment made by an individual or a corporation which acquires at least 10% of ownership of a foreign company, thus gaining some control interests in the company. A portfolio investment, on the other hand, is when the investor owns less than 10%. Other assets include mainly loans and deposits. The proportion of portfolio investment which is directed toward tax havens is astonishing: in 2007 the Cayman islands reported an inbound portfolio investment of 1.827.291 million dollars – the 6th 6 largest in the world – with a GDP 2.415 millions. Without going overseas, in 2007 Luxembourg had a greater inbound portfolio investment than japan, which has 250 times the population of Luxembourg (Hines (2010)). Tax havens receive also large proportion of FDI: in 2004 American firms located 27% of their foreign gross assets in tax havens and declared that 42% of their foreign income were earned in tax havens (Hines (2010)). This pattern reflects the desirability of locating capital and income-earning activities in low tax jurisdictions: tax havens are very attractive locations for purely pass-through financial entities. Indeed many corporations do not establish productive activities in tax havens, which explains the incredible disproportion between capital inflow and GDP. Even though FDI are almost entirely undertaken by multinational companies, capital injected into tax haven comes from both wealthy individual investors and corporation, mainly with the purpose of avoiding, or even evading, taxes. 3.1 Multinational companies and tax avoidance Over the past decades, the activity of multinational enterprises (MNEs) has increased relentlessly. As reported by Dharmapala and Riedel (2013), from 1990 to 2004, FDI by MNEs grew at an average annual rate of 12,4%, which is more than double than the 5% growth rate of economy. Those companies, whose importance in global economy is growing decade after decade, own a quite large number of affiliates in tax havens. However, to what extent and how they make use of these affiliates largely depends on corporate tax rates across countries and on how their home countries tax foreign income. The shared concern in the international community is that MNEs exploit differences in tax rates across countries and use their affiliates in tax havens for avoiding taxes, namely by shifting income from high-tax to low-tax jurisdictions. Gravelle (2015) describes some of the most common techniques used by corporations for avoiding taxes. In particular, the two most used are debt shifting and transfer pricing. The technique of debt shifting consists in borrowing more in affiliates located in high-tax jurisdictions, where interest on debt is tax deductible, and establishing all equity financed affiliates in low-tax jurisdictions. Another well-established technique is that of manipulating the transfer pricing, that is the prices at which the subsidiaries of a given group buy their own products from each other. Companies can shift income by artificially lowering the price of goods and services sold by parents and affiliates of the same company in high-tax jurisdictions and increasing the price of purchases. In this way profits appear in tax havens and losses in non-havens. In the attempt to limit the scope for this practice, regulatory agencies tried to impose the so called “arm-length principle”: intra-group transactions should be carried out at the market price of the goods and services traded, as if the subsidiaries were not linked. However, controlling that 7 companies are respecting this principle is a complex task, in particular for the transfers of rights, intellectual properties and intangible. Indeed, companies operating with this kind of products are particularly active in tax havens. Other techniques include contract manufacturing and tax deferral techniques as cross crediting and check-the-box provisions. Deferral techniques are particularly used by US corporations. The US government, unlike the biggest part of major capital exporter’s governments, taxes income earned inside the national territory as well as income earned abroad. The latter, however, is not taxed until is repatriated: the behavioral consequence for US multinational corporations is that they are more incentivized to use tax havens to delay repatriation of income, which is known as deferral. Desai et al. (2006) empirically identify the characteristics of the US MNEs that make the most extensive use of tax havens and which are the determinants for tax havens operations. To do so, they perform a Logit regression where the dependent is a dummy variable taking value of 1 if the parent company owns at least an affiliate in a tax haven, and a Tobit regression where the dependent is the fraction of a firm’s foreign affiliates located in tax havens. The explanatory variable are the quantity of non-haven sales, the quantity of parent sales, the average industry non-haven tax rate, the industry share of sales to related parties abroad and the parent R&D to sales ratio. The analysis is performed for years 1982, 1989, 1994, 1999. Their findings support the concern that multinational firms carry out operation in tax havens as a part of their international tax avoidance strategies. They discover that larger firms are more likely to have foreign affiliates, as well as those with an higher fraction of foreign operations. This holds particularly for corporations with a high fraction of intrafirm sales and high R&D/sales ratio, whose products are often intangible technology assets or intangible properties as patents. This seem to support the fact that multinational companies makes extensive use of transfer pricing to avoid some tax payments. Moreover, results from the regression indicate that multinational corporations operating in industries with low foreign tax rates are more likely to operate in tax havens, confirm that US firms with low foreign tax rates benefit from making use of tax havens to defer US taxation of their foreign income. To provide further evidence they distinguish between large tax havens - Hong Kong, Ireland, Lebanon, Liberia, Panama, Singapore, and Switzerland, which they call “Big 7 Havens – and all other havens, which they call “dots”. Results show that high foreign tax rates in non-haven countries are associate with greater operations in the “Big 7” where corporations can establish real operations, which is a further evidence of firms relocating taxable income using, for example, profit shifting. To conclude their analysis, they perform a new regression where the dependent variable is the ratio of tax payments to sales for affiliates located outside of tax haven countries. They add more explanatory variable and it emerges that while the ownership of regional tax havens affiliates – intended as geographic proximity – is associated with a significant reduction in tax payments. More recent empirical work present similar results for European countries. Gumpert, Hines and Schnitzer (2016) reports evidence of tax avoidance behavior of German MNEs. However, the relative small number of companies owning tax havens affiliates (roughly 20% with respect to the 59% of 8 US companies) indicate that most of the time available tax savings can be lower than the costs to establish tax haven affiliates, due to firm-specific marginal costs of income reallocation. 3.2 Methods of avoidance and evasion by individuals Financial services offered by tax havens are not addressed exclusively to corporations. While most of the time, corporations do not expose their selves to huge scandals by illegally evading taxes, but mainly exploit tax system loopholes to “legally” avoid taxes, wealthy individuals make a quite different use of tax havens. Gravelle (2015) explains that offshore evasion of individuals can take different forms. For example, they could invest in foreign stock and bonds, which usually takes the form of a portfolio investment. Else, they can put money in a bank account located in tax havens, which usually offers very high protection of their clients’ privacy and high levels of banking secrecy. Finally, individual can make use of trusts or create shell and sham companies to disguise their wealth offshore, and not pay taxes on that income. Gravelle (2105) reports an example, made by Guttenberg and Avi-Yonah, of how individuals typically evade US taxes through a Cayman Island operation. An individual, using the Internet, can open a bank account in the name of a Cayman corporation (or equivalently use a trust ore set a shell company). Money can be electronically transferred without any reporting to tax authorities, and investments can easily be made in the United States or abroad, since usually investments by nonresidents in interest bearing assets and most capital gains are not subject to a withholding tax. In most of the cases, this operation is entirely protected by strict banking secrecy rules. Some countries have engaged in the fight against overseas tax evasion, mainly by improving exchange of financial information among countries and trying to put a brake on banking secrecy. In 2010, the American congress enacted the Foreign Account Tax Compliance Act, which impose foreign financial institutions to choose between reporting information on asset holders or be subject to a 30% withholding rate. Following the same wave, the European Union Saving Directive forced the EU member to choose between information reporting or a withholding tax: only 3 countries – Austria, Belgium and Luxembourg – chose not to report information, while the United States decided to not participate to the agreement. Although the measures taken by the various countries are incomplete and not very effective, something is changing globally on banking secrecy, limiting the future of tax havens on this front. To date, in fact, 105 countries around the world have signed up the “multilateral competent authority agreement on automatic exchange of financial account information” formulated by the OECD in its attempt to increase and facilitate multilateral and bilateral exchange of information. In 2016, some of the most important financial centers, including Switzerland, Luxembourg and Hong Kong, accepted to disclose bilateral information about the amount of bank deposits owned by foreigners in their banks. Moreover, various scandals and leaking of information took place in last 9 years, involving some of the most important financial institutions located in tax havens – see for example the well-known case of Panama Papers. Scholars have been taken advantage of these events to try to estimate the amount of household financial wealth which is held offshore. Zucman (2013), exploiting anomalies in global investment statistics, estimated that 8% of households’ financial wealth is held in tax havens; this amount is equivalent to 10% of the world GDP. Alstadsæter et al. (2018) confirmed his results by taking advantage of the bilateral release of information, and find that this amount is heterogeneously distributed among countries, and cannot be explained by differences in tax rates. They found that countries with the greater stock of offshore assets are often autocracies – Russia and some Latin American countries hold the equivalent of the 60% of their GDP offshore – together with countries with a long tradition of democracy – as United Kingdom and France, which old around 15% of their GDP oversees. At the same time, some of the countries with the lowest amount of wealth held offshore are Korea – a typical low-tax economy – and Scandinavian countries – some of the world’s highest tax countries. Geography also showed to be an important determinant: proximity to Switzerland explains a great fraction of the foreign wealth held in their bank accounts. However, due to the illegal nature of tax evasion, it is also important to consider a possible important margin of error in these kind of estimations. In particular, last decade’s boom of the use of shell and sham companies poses several difficulties in the measurement of offshore households’ financial wealth. 4. Tax Havens and economic growth Tax havens are often considered as “parasites” that erode the tax base of high-tax countries and divert economic activities that would have otherwise taken place in non-havens. The concern is so strong in the international community that in 2013, with the support of the leaders of major developed countries, the OECD publish its report “Addressing Base Erosion and Profit Shifting”, where it declares that profit-shifting strategies by MNEs raise serious issues of fairness and compliance and that “what is at stake is the integrity of the corporate income tax”. Nevertheless, the numerous initiatives undertaken by national governments and international organizations in the last decades to limit tax avoidance behavior of MNEs have never yielded the desired results, and the amount of foreign capital injected in tax havens has continued to grow undisturbed. While the phenomenon of tax evasion by wealthy individuals is not so easy to curb, tax avoidance by MNEs most of the time consists in legally exploiting the loopholes of tax systems. In its report, the OECD acknowledges that “the current international tax system, characterized by inter-state tax competition, rather than by co-operation, has not kept pace with developments in the business environment, providing MNCs with plenty of opportunities to exploit legal loopholes and enjoy double non-taxation of income”. This leads to the question of whether it is only a matter of a delay by the international community to adapt to these changes or if there is someone else, besides tax havens, who benefits from their activities. 10 4.1 Economic growth in tax havens While it could seem obvious that tax havens benefit from being active financial centers, the questions is much more complex. As Hines (2005) underline, since foreign capital that enters into tax havens almost immediately flows out to industrialized economies, this could easily not translate into real economic growth of tax havens. Moreover, by imposing such low tax rates on foreign capital, they renounce to a large flow of tax revenue which could have been devoted to the funding of their welfare systems. Nevertheless, Hines (2005) empirically demonstrates that tax havens “flourish” in terms of economic growth, displaying economic growth rates consistently higher than the economies of higher-tax countries: haven countries as a group exhibited 3,3% annual per capita GDP growth from 1982 to 1999, whereas the world averaged just 1,4%. Also, he shows that the public sector is not particularly affected by the extremely low tax rates, with similar ratio of government expenditures to GDP as comparable non-haven countries. Indeed, even very low tax rates produce significant revenues when the tax base is very large, as it is the case for tax havens which attract huge flows of capital. Blanco and Rogers (2012) confirm these results also when addressing endogeneity of tax haven status, and on a more recent sample of countries. As seen in Dharmpala and Hines (2009) the tax havens status around countries is not random, but has some very precise determinants that could explain part of the related economic growth. For this reason, they run a 2SLS regression using land area as an instrument instead than a tax haven status dummy, which still confirms the higher economic growth of tax havens. 4.2 The impact of preferential tax regimes in developed countries While most scholars agree on the fact that corporation are shifting profits to tax havens to avoid taxes, the debate is still really ongoing on the effects that this behavior has on the business activity and economy of high tax countries. Basically, the tradeoff is the following: profit shifting to tax havens erodes the tax base of high-tax countries thus reducing tax revenues. On the other hand, profit shifting effectively decreases the investment cost of corporations and this could promote investment and economic activity. The first point of view is supported by the well know work of Slemrod and Willson (2009), in which they define tax havens as “parasites” which are responsible for pushing excessive tax competition. They develop a model in which tax havens, by offering extremely low taxes, in turn oblige nonhavens to adopt tax rates lower than their optimum, thereby reducing their available budget for public expenditures. In contrast, in the same period Desai, Folei and Hines (2006) consider the effect of tax havens on investments in high-tax countries through what they defines as the complementary effect, meaning that if “foreign investment makes the use of tax havens more attractive, it follows that the use of tax havens makes foreign investment more attractive”. More precisely, by giving corporations some arbitrage on tax payments, the possibility of making use of tax havens reduce actual investment 11 costs of corporations, thereby stimulating their activity, particularly in the neighborhood of tax havens. Ten years later, scholars are far from finding an agreement. Most of the debate about profits shifting focuses on tax revenues: as an example, Clausing (2016) estimates that profit shifting is likely to cost the US government between 77 billion USD and 111 billion USD by 2012. In a very different paper, however, Suarez (2018) studies the effects of the repeal of Section 936 of the US internal revenue code, which excluded the income of Puerto Rican affiliates from corporate taxes. This rose tax rate of exposed multinational corporations by 4.65-6 percentage points relative to non-exposed firm, which lead to a reduction of their global investment by 10%, increased their share of investment abroad by 12% and reduced their US employment by 6.7%. He also found that the slowdown of employment growth persisted for 15 years after the repeal of 936. Using spatial variation, he found that in more exposed industrial areas, the slowdown of employment growth persisted for 15 years after the repeal of 936. These areas also experienced relative decrease in income, wages, and home values, becoming more reliant on government transfers. His results strongly support the theory that profit shifting not only distorts tax revenues, but has a real effect on foreign and domestic investment and other economic indicators, as unemployment. What is the prevailing effect, however, is still far from being clear. 4.3 The impact of preferential tax regimes in developing countries Developing countries face the same trade off dealt with in session 4.2. However, when trying to assess the impact of tax haven’s activity on the economy of developing countries, it is important to consider the deep structural and institutional differences existing between developed and developing countries. Developing countries often have to deal with poverty and a big informal sector. For this reason, they tend to depend more on corporate tax as a share of total tax revenue than developed economies, and consequently could be more affected by the erosion of the corporate tax base. Also, they rely heavily on flows of foreign capital to sustain their economies. As a consequence, they may risk to engage into a very harmful tax competition in an attempt to attract as many foreign capital flows as possible. Some interesting evidences support this concern: the UK International Development Committee estimated that in 2012 tax revenues in developing economies represented the 13% of their GDP, while developed economies collected the equivalent of the 35% of their GDP. In 2011, the government of India indicated that losses due to tax incentives could be estimated at more than 5% of their GDP. Crivelli, Keen, and de Mooij (2015) empirically demonstrate how profit shifting problems are likely to be especially pressing in less developed countries. By conducting a panel data analysis on a sample of 173 countries (OECD and non-OECD members) they conclude that base spillovers – meaning the impact of countries’ tax policy on the tax base of other countries – is noticeably stronger for non-OECD countries than for OECD countries, and statistically more significant. 12 Blanco and Rogers (2014) suggests that there might be a positive neighborhood effect for developing country due to the proximity to tax havens. They observe, for example, that El Salvador, Guatemala, Honduras, Mexico and Nicaragua benefit in terms of FDI by being in close proximity to Belize. However they find that, while increased FDI is generally associated with economic growth, the proximity to tax haven may have a different impact on welfare measure, suggesting that harmful tax competition might be stronger than positive spillover effects. 5. Conclusions Relying on a small part of the existing body of literature about tax havens, this literature review has tried to offer a quite comprehensive insight to the reality of tax havens and the important consequences that these small countries have on the world’s economy. To date, the international community is divided between those who argue that tax havens are completely harmful to non-haven economies and those who argue that under the right circumstances, tax havens can stimulate international production and investment. But while the debate is still ongoing, a fact clearly emerges: the ever increasing integration of the production process and financial markets is making tax havens increasingly determinant actors in the global scenario. Individual countries and international organizations will have to confront each other and improve their cooperation, especially in terms of exchanging information, in order to limit the damage caused by tax havens activity, and seize the opportunities to benefit from it. On this front, the international community has already made great strides in the fight against banking secrecy, but much more can be done in terms of tax coordination and adaptation of laws to the new business environment. 13 6. References 6.1 Main references 6.2 Other empirical evidences Alstadsæter, A. & Johannesen, N. & Zucman, G. 2018. "Who owns the wealth in tax havens? Macro evidence and implications for global inequality". Journal of Public Economics, Elsevier, vol. 162(C), pages 89-100. Suárez Serrato, J. C. 2018. "Unintended Consequences of Eliminating Tax Havens". NBER Working Papers 24850, National Bureau of Economic Research, Inc. Blanco, L. R. & Rogers C. L. 2012. "Do Tax Havens Really Flourish?". Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 12(3), pages 1-23, August. Clausing K. A. 2016. "The Effect of Profit Shifting on the Corporate Tax Base in the United States and Beyond" National Tax Journal, National Tax Association;National Tax Journal, vol. 69(4), pages 905-934, December. Blanco, L. R. & Rogers C. L. 2014. "Are Tax Havens Good Neighbours? FDI Spillovers and Developing Countries". Journal of Development Studies, Taylor & Francis Journals, vol. 50(4), pages 530-540, April. Crivelli, E. & de Mooij, R. A. & Keen, M. 2015. "Base Erosion, Profit Shifting and Developing Countries" IMF Working Papers 15/118, International Monetary Fund. Dharmapala, D. & Hines J., 2009. "Which countries become tax havens?". Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1058-1068, October. Desai, M. A. & Foley, C. F. & Hines, J. R, 2006a. "The demand for tax haven operations". Journal of Public Economics, Elsevier, vol. 90(3), pages 513-531, February. Desai, M. A. & Foley, C. F. & Hines, J. R. 2006a. “Do Tax Havens Divert Economic Activity?”. Economics Letters, Elsevier, vol. 90(2), pages 219-224, February. Eden, L. & Kudrle, R. T. 2005. “Tax havens: Renegade states in the international tax regime?”. Law and Policy, 27(1), 100-127. Dharmapala, D. & Riedel, N. 2013. "Earnings shocks and tax-motivated income-shifting: Evidence from European multinationals". Journal of Public Economics, Elsevier, vol. 97(C), pages 95-107. Gumpert A. & Hines, J. R. & Schnitzer M. 2016. "Multinational Firms and Tax Havens". The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 713-727, October. Hines, J. R. 2010. "Treasure Islands". Journal of Economic Perspectives, 24 (4): 103-26. Organization for Economic Development and Cooperation. 1998. “Harmful Tax Competition: An Emerging Global Issue”. OECD. 2019. Signatories of the multilateral competent authority agreement onn automatic exchange of financial account information and intended first information exchange date. https://www.oecd.org/tax/exchange-of-taxinformation/MCAA-Signatories.pdf Gravelle, J. 2015. “Tax Havens: International Tax Avoidance and Evasion”. Congressional Research Services. Extended version of: Gravelle, J. 2009. Tax Havens: International Tax Avoidance and Evasion. National Tax Journal, 62(4), 727-753. Hines, J. R. 2005. "Do Tax Havens Flourish?" NBER Chapters, in: Tax Policy and the Economy, Volume 19, pages 65-100, National Bureau of Economic Research, Inc. . Slemrod, J. & Wilson, J. D. 2009. "Tax competition with parasitic tax havens". Journal of Public Economics, Elsevier, vol. 93(11-12), pages 12611270, December. 14
