Bargaining Over Tax Information Exchange

Abstract:     
This paper empirically studies recent treaty signings between tax havens and OECD countries as the outcome of a bargaining process over treaty form. Havens can decide not to sign an agreement, sign a tax information exchange agreement or a double taxation convention. We use a highly stylized bargaining model to develop testable hypotheses with regards to the type of agreement signed. We show that the main determinants of treaty signing is a haven's bargaining power and good governance. We show that it is easier to renegotiate an already existent treaty to include information exchange than to pressure countries with no existent agreement.

Number of Pages in PDF File: 37

working papers series