Panama Papers: Who were the big players?

The Panama Papers revealed a systemic challenge to global governance, in which the big players are major banks, multinationals and the biggest financial centres of all. Unsurprisingly, much of the coverage of the Panama Papers focused on juicy, individual stories: political conflicts of interest, criminal money laundering and HNWI tax evasion in exotic locations. But when you look at all the data, you see a different picture.

With a few friends of TJN, we’ve been running some of the numbers on Panama, to see just where this small jurisdiction fits in the global game. The picture is inevitably partial – a leak from Jersey or Delaware would show other angles. But what is revealed is a clear snapshot of one part of the systemic business making use of secrecy. Not necessarily for corrupt purposes… but when your business is not engaged in some sort of unsavoury activity, you don’t need secrecy, so the use of secrecy is a pretty good red flag for further investigation.

Read the full blog post from TJN here

CBS/COFFERS PhD fellow Saila Stausholm presented at the IMF

CBS/COFFERS PhD fellow Saila Stausholm went to the IMF in Washington, D.C. to give a presentation about her paper on tax incentives, entitled “Give us a break: the impact of tax holidays on developing countries”. Her research looks at the phenomenon of tax holidays and its effect on developing countries in terms of economic and social outcomes. In the presentation she showed how new data documents a recent increase in the use of tax holidays throughout all four regions surveyed: Latin America, Asia, Africa and the Caribbean. She presented her finding that the effect of tax holidays on FDI is negligible and decreasing, and importantly, that the attracted FDI does not translate into neither real capital accumulation nor economic growth. Her research shows that tax holidays are negatively correlated with tax revenues, and as revenues go down, spending on education decreases. This indicates that there is a race to the bottom when it comes to tax incentives and the competition for investment, which may act as a transfer mechanism from the poor to the pockets of corporations.

The animated map shows how the use of tax holidays changes over the course of the period surveyed – red indicating that the country offers a tax holiday, and green that they do not (white that they are not in the sample). There is a lot of variation over time and across regions, however, over the last 5 years the use of tax holidays has been increasing in all parts of the developing world.

Karin Heitzmann visits COFFERS team at USE

Prof. Karin Heitzmann, co-director of the Institute for Inequality INEQ from the Wirtschaftsuniversität Vienna, visited COFFERS on Friday 24th of February 2017. She presented her latest work on inequality and the latest OECD data on inequality where she had been involved.

COFFERS will cooperate with INEQ for data on inequality.

COFFERS team meeting in Vienna on March 8th 2017

For the second time, the steering committee of the COFFERS team met for a workshop in Vienna the 8th of March 2017. Located in the Biedermeier Mercure Hotel, the team discussed new theoretical approaches to ecosystem analysis and its application for COFFERS. The Workshop leaders presented their former and future work plans. Ronen Palan, Lucia Flores Rossel and Peter Gerbrands presented theoretical findings related to Working Package 1 (theoretical background) and Working Package 6 (policy evaluation).

New Report – Delivering a level playing field for offshore bank accounts

The OECD’s Global Forum is set to publish the terms of reference for peer reviews on automatic exchange of information pursuant to the OECD’s Common Reporting Standard (CRS) in the near future. The terms of reference for that peer review process in many ways will define how the system of Automatic Exchange of Information works in practice. If assessments are too lenient or if they only focus on the legal framework (but not on what happens in practice nor manages to identify avoidance schemes), automatic exchange of information is unlikely to be successful. TJN has put together a report setting out what the terms of reference should contain to ensure that an effective system of information exchange is implemented. Chief among these elements are specific statistics to ensure compliance, identify avoidance schemes and allow evaluation by independent and excluded parties (e.g. developing countries and civil society).

The report describes TJN’s proposed template for statistics and explains how they can be used to identify avoidance schemes and cases of non-compliance.

http://www.taxjustice.net/2017/03/10/19667/

COFFERS participation in the ECE conference 2017

Brigitte Unger PI of COFFERS met Asa Gunnarsson PI of FAIRTAX in Brno, Czech Republic 9th and 10th of March. Both are EU Horizon 2020 projects on taxation that end in 2019.

At the conference Brigitte Unger presented COFFERS, Combating Fiscal Fraud and Empowering Regulators, which focuses on tax regulation and its impact. Asa Gunnarsson presented FAIRTAX which deals with sustainable tax systems and gender equality.

Richard Murphy, Petr Jansky and Miroslav Palansky presented papers at the Brno conference.

Petr Janský from CUNI took part in the FairTax special session of the conference Enterprise and Competitive Environment 2017

In his presentation titled “Country-by-Country Reporting Data and Locations of European Banks’ Activities and Profits” Petr Janský presented some COFFERS-supported as well as other research results on misalignment between reported profits and real economic activity across countries.

Miroslav Palanský from Charles Univesity presented a draft of a paper called “Estimating the scale of corporate profit shifting: Tax revenue losses related to foreign direct investment” written jointly with another COFFERS team member, Petr Janský. The paper uses bilateral foreign direct investment data to estimate, at country level, tax revenue losses that result from some corporate profit shifting practices.”

 

Link to the conference is found here

The OECD – penalising developing countries for trying to tackle tax avoidance brief analysis by TJN’s Alex Cobham and Andreas Knobel

Alex Cobham, research director of Tax Justice Network and COFFERS researcher, recently published jointly with TJN’s Andres Knobel a brief analysis of a new OECD specification on Country-by-Country Reporting (CbCR) – a topic very dear to COFFERS.

Their analysis shows that OECD’s new terms of reference  to assess the implementation by countries of BEPS Action 13 related to CbCR may penalise countries, especially developing ones, that try to obtain by their own means the CbCR’s valuable data needed to tackle multinational tax avoidance.

The analysis can be read here: http://www.taxjustice.net/2017/03/07/19628/

Capital unchained: finance, intangible assets and the double life of capital in the offshore world

A new article in a Review of International Political Economy special section on Global Wealth Chains edited by COFFERS researchers Leonard Seabrooke and Duncan Wigan. Here, with Dick Bryan and Mike Rafferty, Duncan explores conceptual and regulatory challenges posed by the rise of the knowledge economy and intangible assets, such a intellectual property, in terms of fiscal systems and the capacity to tax international firms. Using a framework focused on measuring (by accountants), managing (by corporations) and monitoring (by  scholars and regulators), the article explores the longer term implications of internationalised capital in intangible and abstract forms.

Link to article can be found here

Participation of COFFERS researchers Ronan Polan and Brooke Harrington in the European Parliament, Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion

Public Hearing – The Role of Lawyers, Accountants and Bankers in Panama Papers – (Part I)

Brooke Harrington, Copenhagen Business School and Ronan Polan, City University London both participants in the COFFERS project participated in the public hearing – the Role of Lawyers, Accountants and Bankers in Panama Papers in Brussels on January 24th 2017.

See link for publications and article by Ronan Polan here