Gould, M. and Rablen, M. orcid.org/0000-0002-3521-096X (2020) Voluntary disclosure schemes for offshore tax evasion. International Tax and Public Finance, 27 (4). pp. 805-831. ISSN 0927-5940
Abstract
Tax authorities worldwide are implementing voluntary disclosure schemes to recover tax on offshore investments. The US and UK, in particular, have implemented such schemes in response to bulk acquisitions of information on offshore holdings, recent examples of which are the "Paradise" and "Panama" papers. Schemes offer affected investors the opportunity to make a voluntary disclosure, with reduced fine rates for truthful disclosure. Might such incentives, once anticipated by investors, simply encourage evasion in the first place? We characterize the investor/tax authority game with and without a scheme, allowing for the possibility that some offshore investment has legitimate economic motives. We show that a scheme increases net expected tax revenue, decreases illegal offshore investment, and increases onshore investment, but could either increase or decrease legal offshore investment. The optimal disclosure scheme offers maximal incentives for truthful disclosure by imposing the minimum allowable rate of fine.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2020 The Authors. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. |
Keywords: | voluntary disclosure; offshore tax evasion; tax amnesty; third-party information |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 02 Dec 2019 16:39 |
Last Modified: | 12 Nov 2021 10:38 |
Status: | Published |
Publisher: | Springer Nature |
Refereed: | Yes |
Identification Number: | 10.1007/s10797-019-09586-1 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:154107 |
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