WP3 – Jurisdictions

coffers 15 Jul , 2016

Work Package (WP) 3: Jurisdictions

WP Leader: University of Bamberg, Thomas Rixen

Other Partners: Utrecht University


  • Assess whether tax administrations create the necessary infrastructure and procedures for the implementation of automatic information exchange.
  • Assess whether governments alter national tax policy in response to international cooperation on automatic information exchange.

Description of work:

  • To achieve the first goal WP3 studies national tax administration’s organizational reaction to the international agreement on automatic information exchange. We then trace variance in task allocation, deployed resources, and staffing to decision-makers’ concerns over competitiveness, organizational capacity, and social norms. Based on in-depth case studies of several national administrations, we determine to what extent international information exchange is enabled or constrained by domestic implementation.
  • To achieve the second goal WP3 identifies changes in the taxation of capital across member states of the Organisation for Economic Cooperation and Development (OECD). We then seek to explain these changes with different levels of cooperation at the international level, and mediating factors at the domestic level, including partisan differences, voter attitudes, institutional or administrative constraints, and country size. To this end, we combine innovative quantitative analysis and in-depth case studies.


Between 2010 and 2014 a new global regime on the automatic exchange of account information emerged. Under the regime, most major tax havens report foreign account holders and their capital income to their respective home countries. This makes tax evasion a lot more difficult. As the new regime seems to put brakes on tax competition – the main reason for low taxes on capital income – we want to find out whether the downward trend in tax rates is coming to a halt or even reversing. Of course, many political and institutional factors are likely to mediate the impact of international cooperation on national tax rates. Hence, we assume that the decline in tax rates on capital income will only come to an end, if two things happen at the national level:

(a) tax administrations in all countries need to fully implement the new regime’s information exchange provisions; and

(b) tax policy makers need to exploit their new leeway and actually increase capital tax rates.

Against this background, we want to answer why tax policy and administrative change is transformative in some countries, but incremental or even absent in others? To this effect, we develop several hypotheses. With respect to administrative implementation, initial hypotheses are built around (i) the conflicting interests of high- and low tax countries, (ii) the institutional capacity of national administrations, (iii) and the diffusion of regulatory models among interdependent countries. With respect to tax policy changes, initial hypotheses focus on (i) partisan differences, (ii) countervailing pressures against capital interests coming from the electorate, and (iii) country size determining whether a jurisdiction tends to import or export capital.

At a more abstract level, we aim to identify the conditions under which international cooperation becomes a Darwinian devil for the evolution of national tax policy.

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