European regulation mandates public country-by-country reporting for banks and is expected to increase costs of tax haven activities. We hand-collect data from IFRS consolidation scopes for European banks and test whether the availability of additional public information on banks' global activity reduces their tax haven presence. In a difference-indifference analysis, we find that indeed tax haven presence has declined significantly after the introduction of mandatory public country-by-country reporting for European banks, as compared to the insurance industry, which is not subject to this regulation. In further tests, we show that this negative association is particularly driven by a reduction of subsidiaries in "Dot-Havens" and tax havens with high financial secrecy.

No abstract

We analyze the impact of trust on bargaining behavior between auditor and auditee in a tax setting. We study the effect of interpersonal trust and trust in government on both taxpayer and tax auditor. In an experiment with variation in pairwise trust settings, we find evidence that both kinds of trust affect the bargaining behavior, albeit in different ways. While trust in government increases taxpayers' tax offers, trust in government may lead to more concessionary behavior of tax auditors moderated by interpersonal trust. Our findings help tax authorities to shape programs to enhance compliance in an atmosphere of trust.

No abstract