Counteracting offshore tax evasion: Evidence from the foreign account tax compliance act

Carmela D’avino (1)

1 ESC Rennes School of Business

This paper aims to investigate the effect of the Foreign Account Tax Compliance Act (FATCA) on the deposits held by US global banks through their branches located around the world. Using an unpublished dataset on deposits held by branches of US banks on a geographically unconsolidated basis, we find that the FATCA led to a reduction in deposits held in branches located in tax havens. We find that this effect is more severe in those jurisdictions signing a reciprocal exchange of information agreement. We also advance evidence in support of deposit shifting within the US banking system towards locations without a reciprocal intergovernmental agreement.

Domaines: Sciences de l'Homme et Société; Economies et finances

Carmela D’avino. Counteracting offshore tax evasion: Evidence from the foreign account tax compliance act. International Review of Law and Economics, 2023, 73, pp.106126. ⟨10.1016/j.irle.2023.106126⟩. ⟨hal-03980948⟩