Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. http://ftp.zew.de/pub/zew-docs/dp/dp18036.pdf Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar. Terms of use: Documents inDis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Cross-Border Tax Evasion After the Common AbstractBack in 2013, the Automatic Exchange of Information (AEOI) was endorsed as the prevailing universal solution to fight cross-border tax evasion. In this regard, the OECD launched a global standard for the AEOI, the Common Reporting Standard (CRS). Currently, around 100 jurisdictions have committed to implement it into respective national laws by 2018.In this study, we analyze the impact of the CRS on cross-border tax evasion using a difference-in-difference research design. By considering a period of four years (2014)(2015)(2016)(2017), results suggest that the CRS induced a reduction of 14% in cross-border deposits parked in offshore locations for tax evasion purposes. Moreover, such wealth and related income has not been repatriated but rather a new location to avoid domestic tax obligations has emerged. More specifically, upon the CRS implementation at domestic level, the United States (U.S.), i.e. the only major economy in the world, which so far did not commit to the CRS, seems to emerge as a potentially attractive location for cross-border tax evasion.JEL Classification: F42, G21, H26, H31

Back in 2013, the Automatic Exchange of Information (AEOI) was endorsed as the prevailing universal solution to fight cross-border tax evasion. In this regard, the OECD launched a global standard for the AEOI, the Common Reporting Standard (CRS). Currently, around 100 jurisdictions have committed to implement it into respective national laws by 2018. In this study, we analyze the impact of the CRS on cross-border tax evasion using a difference-indifference research design. By considering a period of four years (2014-2017), results suggest that the CRS induced a reduction of 14% in cross-border deposits parked in offshore locations for tax evasion purposes. Moreover, such wealth and related income has not been repatriated but rather a new location to avoid domestic tax obligations has emerged. More specifically, upon the CRS implementation at domestic level, the United States (U.S.), i.e. the only major economy in the world, which so far did not commit to the CRS, seems to emerge as a potentially attractive location for cross-border tax evasion.

Firms are facing progressively more stringent tax disclosure requirements. In this paper, we examine whether increased qualitative tax transparency leads to intended outcomes using, as an exogenous shock, the 2016 UK reform that mandated the disclosure of a tax strategy for firms above a certain size threshold. We find that firms that have to publish a separate tax strategy report significantly increase their voluntary tax disclosure in the annual reports, but we show no widespread effect on tax avoidance, measured by changes in effective tax rates. We document two mechanisms through which mandating a tax strategy report affects overall tax disclosure. First, we find large changes in disclosure for firms facing high public scrutiny. Second, firms with higher quality of tax strategy reports increase the qualitative discussion of their tax affairs in their annual reports by larger amounts, while firms with lower quality reports show increases in tax avoidance. Our results demonstrate the difficulty of generating a standard that effectively incentivizes desirable behavior when the disclosure mandate is asking for purely qualitative information.

Firms are facing progressively more stringent tax disclosure requirements. In this paper, we examine whether increased qualitative tax transparency leads to intended outcomes using, as an exogenous shock, the 2016 UK reform that mandated the disclosure of a tax strategy for firms above a certain size threshold. We find that firms that have to publish a separate tax strategy report significantly increase their voluntary tax disclosure in the annual reports, but we show no widespread effect on tax avoidance, measured by changes in effective tax rates. We document two mechanisms through which mandating a tax strategy report affects overall tax disclosure. First, we find large changes in disclosure for firms facing high public scrutiny. Second, firms with higher quality of tax strategy reports increase the qualitative discussion of their tax affairs in their annual reports by larger amounts, while firms with lower quality reports show increases in tax avoidance. Our results demonstrate the difficulty of generating a standard that effectively incentivizes desirable behavior when the disclosure mandate is asking for purely qualitative information. * Acknowledgements: We are especially grateful to Federico Nanni for all the helpful and fruitful discussions. We appreciate the valuable suggestions and comments from