Faculty of Economics and Business Administration Publications Database

Are tax havens good? Implications of the crackdown on secrecy

Authors:
Xu, Fangying
Source:
Link External Source: Online Version
Year: 2018
Keywords: Tax haven, Secrecy, Tax information exchange, China, India
Abstract:

While parts of the economic literature emphasize possible positive effects of tax havens on high-tax countries, the present paper argues that proponents of positive effects may have started from questionable premises, in particular when it comes to the effects that tax havens have for emerging markets like China and India. We reconsider the effect of tax havens if countries can differentiate tax rates conditional on foreign ownership of firms, but tax-haven secrecy makes identification of ultimate ownership difficult. In this setting, we derive positive welfare effects of a crackdown on tax haven secrecy.

back