Work Package (WP) 1: Theory and Benchmarking

WP Leader: City University London, Ronan Palan

Other Partners: Copenhagen Business School, Utrecht University, University of Bamberg

The City researchers have three distinct themes to their work:

  • Professor Palan is tasked with providing the theoretical underpinning for the project.
  • Professor Nesvetailova will focus on investigating the role of financial engineering in facilitating tax abuse.
  • Professor Murphy has responsibility for coordinating the output of all research teams in the project so that a new estimate of the EU tax gap can be prepared. He will have a particular focus on preparing new estimates of tax lost in the corporate sector, using new methodological tools based on country-by- country reporting data.

Objectives:

  • Establish a clear theoretical framework for COFFERS allowing for the identification of the trajectory of system change.
  • Establish the scale of the obstacle to a more equitable European community in terms of size of the tax gap, or the amount of revenue forgone due to tax abuse in its various forms.
  • Present a survey of the techniques of financial engineering available in Europe that can be used for tax avoidance purposes.
  • Build case studies on the most significant regulatory innovations to determine the potential effectiveness of system change in addressing European inequalities.

Description of work:

  • The first goal is to set a clear theoretical basis for the COFFER programme. It establishes the nature of the evolutionary theory used and the evolutionary processes that this theory depicts.
  • The second goal is to establish the baseline on what resources are foregone because of practices of tax evasion, avoidance and illicit activities. The work packages assesses existing estimates of the tax gap, identifying their strengths and deficiencies and identifies how the tax gaps has been measured across European Member States.
  • The third goal is to examine key regulatory innovations to establish their nature, their limitations and their strengths, potential and in-built. Here there a three cases. The first redresses the current and limited knowledge of financial instruments and structure finance products used for tax avoidance in the financial services industry.

Click here for deliverables