Free DP Downloads 08 February 2021 - BANKS DEFY GRAVITY IN TAX HAVENS; GREY ZONES IN GLOBAL FINANCE

Thursday, February 25, 2021

Work by CEPR Researcher Anne-Laure Delatte recently covered by Le Monde sheds light on the global geography of international tax avoidance with a particular focus on Luxembourg, the controversial tax haven at the heart of Europe. 

You can read a synopsis in French by Anne-Laure and colleagues here: 'La place du Luxembourg dans l’économie de l’évitement fiscal'.

Read the article in Le Monde 'OpenLux : au Luxembourg, une économie artificielle dopée par les sociétés offshore' here

Download the full CEPR research findings here:

 

Download for free

 

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Grey Zones in Global Finance: the distorted Geography of Cross-Border Investments
Anne-Laure Delatte, Amélie Guillin, Vincent Vicard
CEPR DP No. 14756 May 2020

Tax avoidance schemes generate artificially complex cross-border financial structures inflating measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40% of global assets (FDI, portfolio equity and debt) are 'abnormal' - unexplained - stocks. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away.

 

Banks Defy Gravity in Tax Havens
Vincent Bouvatier, Gunther Capelle-blancard, Anne-Laure Delatte
CEPR DP No. 12222 August 2017

This paper provides the first quantitative assessment of the contribution of global banks in intermediating tax evasion. Applying gravity equations on a unique regulatory dataset based on comprehensive individual country-by-country reporting from all the Systemically Important Banks the European Union, we find that: 1) Tax havens generate a threefold extra presence of foreign banks; 2) The favorite destinations of tax evasion intermediated by European banks are Luxembourg and Monaco 3) British and German banks display the most aggressive strategies in tax havens ; 4) New transparency requirements imposed in 2015 have not changed European banks commercial presence in tax havens; 5) Banks intermediate e550 billion of offshore deposits, that is 5% of their origin countries' GDP.

 

 


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