EU Tax Observatory Lunch Seminar
The seminar takes place at Paris School of Economics, 48 boulevard Jourdan and via Zoom.
The increased global mobility of capital and labour poses a number of challenges to national tax systems: intricate global structures to hide personal wealth from the eyes of tax administrators and regulators, conflicts about the international allocation of taxing rights, a fast-evolving international tax policy landscape. The seminar focuses on the topic of taxation in the global economy and aims to bring together international junior and senior researchers working on international taxation, tax avoidance and evasion, tax competition, tax harmonization and related topics. Presentations can be polished papers or work in progress. The aim is to learn from each other and to discuss in a friendly atmosphere.
The seminar is organized by the EU Tax Observatory, an EU-funded research laboratory hosted at Paris School of Economics.
This project has received funding from the European Union (TAXUD/2022/DE/310).
Please find below the schedule and the location for the next seminar sessions:
- Wednesday 5 October 2022 12:00-13:00
- Salle R 1.13, Campus Jourdan
- CASI-EBERHARD Elisa (Norwegian School of Economics) : So close and yet so far: The ability of mandatory disclosure rules to crack down on offshore tax evasion
- Mohammed Mardan and Rohit R. Muddasani
- AbstractWe study the short-term effect of the introduction of the mandatory disclosure program for aggressive tax arrangements by focusing on the one introduced in May 2018 under the Council Directive 2018/288/EU (or DAC6). Employing bilateral data on cross-border deposits, we study the effect of this new disclosure requirement on cross-border tax evasion. Our results show a reduction of cross-border deposits in EU countries with a strong enforcement, captured by large monetary penalties for misreporting. At the same time, we document a relocation of income and wealth to countries with limited intermediary reporting obligation. Finally, we detect an increase in the volume of cross-border deposits from countries offering citizenship/residence by investment programs, suggesting the use of these schemes as regulatory arbitrage to circumvent the disclosure mandated under DAC6. We provide timely and relevant evidence contributing to the debate on international administrative cooperation to reduce cross-border tax evasion.
- Wednesday 19 October 2022 12:00-13:00
- Salle R1.13, Campus Jourdan
- PAPPADÀ Francesco (PSE, Banque de France) : Sovereign default and imperfect tax enforcement
- Yanos Zylberberg
- AbstractIn economies with imperfect tax enforcement, the dynamics of the informal economy might mitigate the relationship between fiscal policy and default risk. We build a model of sovereign debt with limited commitment and imperfect tax enforcement to assess the consequences of dynamic distortions induced by fiscal policy. In the model, fiscal policy persistently affects taxable activity, which impacts future fiscal revenues and thus default risk. The interaction of tax distortions and limited commitment strongly constrains the dynamics of optimal fiscal policy and leads to costly fluctuations in consumption.
- Wednesday 9 November 2022 12:00-13:00
- PSE, Campus Jourdan, R1.13.
- LOPEZ-FORERO Margarita (Université d’Evry, Paris-Saclay) : Aggregate Labor Share and Tax Havens: Things are not always what they seem
- AbstractWe use French firm-level data to study the role of multinational enterprises' (MNEs) presence in tax havens in determining the dynamics of the aggregate labor share and therefore, income inequalities between workers and capitalists. Given these firms’ weight in the economy, we find that tax haven presence of MNEs accounts for a 5% of the observed increase in the aggregate share of labor in France between 1997-2014. Implementing a difference-in-differences we analyze the effect firm entry in a tax haven on firms' labor share of value added and each of its components. We find that average firm labor share in France experiences an increase by 2.2% over the immediate years following the establishment in a tax haven. We argue that the labor share of MNEs with presence in tax havens is overestimated given that tax optimization partly consists in artificially shifting profits to low tax jurisdictions, thus underestimating domestic value added, which experiences an average drop by 11.1%. Indeed, the labor share increases even if its numerator, total wage bill, decreases on average by 8.8% when MNEs enter a tax haven. Additionally, the total wage bill drop is explained by a strong decline in employment (-8.6%) rather than a decline on average firm wages, on which there is no statistically significant effect. This means that the effect of firms' usage of tax havens on workers goes beyond the underestimation of their share of income. Finally, we implement a panel event study design to show that our estimates capture the tax haven entry effect and not differential trends between treated and control units.
- Friday 18 November 2022 13:00-14:00
- Salles R1.14, Campus Jourdan
- PALANSKÝ Miroslav (Charles University, Prague) : The spillover effects of forced corporate transparency through offshore leaks
- AbstractLeaks of confidential documents from companies that facilitate the creation of secretive corporate structures in offshore jurisdictions have become a major source of information about the world of financial secrecy, with far-reaching consequences for the individuals involved. In this paper, I look at the effects that the leaks have on individuals not directly involved in the leaks, but using schemes and tax havens exposed by the leaks. I develop a new dataset of bilateral corporate transparency and use the leaks in an event-study design to assess their impact on cross-border bank deposits and portfolio investment. I find that offshore leaks negatively influence the use of the implicated offshore jurisdictions: the more pronounced is the presence of a given offshore jurisdiction in an offshore leak, the higher is the effect on inward cross-border financial flows to that jurisdiction. I then investigate whether this effect is driven by one important feature of the data on cross-border financial flows: that it is reported at the immediate ownership level (rather than ultimate). I find a higher negative effect of leaks on financial flows from less-developed countries, in which control mechanisms are weaker, and thereby the costs of setting up a simple offshore structure are lower (via lower detection probabilities).
- Friday 2 December 2022 13:00-14:00
- Salle R1.14, Campus Jourdan
- DELATTE Anne Laure (CNRS, University Paris Dauphine) : Banks Defy Gravity in Tax Havens
- Vincent Bouvatier and Gunther Capelle-Blanchard
- Friday 16 December 2022 13:00-14:00
- Salle R1.14, Campus Jourdan
- PARENTI Mathieu (Université Libre de Bruxelles) : Profit shifting frictions and the geography of multinational production
- Alessandro Ferrari, Sebastien Laffitte, and Farid Toubal
- Friday 9 September 2022 12:00-13:00
- Salle R 1.13, Campus Jourdan
- NICOLAIDES Panayiotis (EU Tax Observatory, Hertie School Berlin) : Electronic Payments Lottery and Tax Revenue: Evidence from a Natural Experiment in Greece
- AbstractThis paper studies a third-party reporting policy - the Greek electronic payments lottery - which incentivises the use of electronic payments over cash to fight tax evasion. The lottery allocates tickets automatically to the entire population of consumers, proportional to their electronic payments, and offers €1 million in prizes split to 1,000 winners every month. Taking advantage of a delayed introduction, 10 monthly draws with 10,000 winners and €10 million in prizes took place retroactively in Christmas 2017. Participation was unanticipated and tickets corresponded to electronic payments completed in previous months. To identify the effect on VAT revenue, I combine information from the universe of winners, a random sample of 50,000 non-winners and monthly VAT revenue from regional tax offices. I estimate (a) every additional winner randomly allocated to a tax office’s jurisdiction, leads to an overall increase of 0.01% in VAT revenue (b) winners initially increase their electronic consumption by 15% after winning, then decrease it to pre-winning levels after 5 months (c) in regions with large number of winners, there is evidence of spillover effects in the electronic consumption of non-winning individuals. While the policy does not change payment habits permanently, the overall revenue effect is fiscally positive.