The Relationship between Offshore Evasion and ‘Aggressive’ Tax Avoidance Arrangements: The HSBC Case

Financial Regulation International (Informa Law), 2016

22 Pages Posted: 3 Apr 2016 Last revised: 14 Apr 2016

See all articles by Iulia Nicolescu

Iulia Nicolescu

University of Warwick - School of Law

Date Written: March 18, 2016


This paper critically analyses the relationship between tax evasion and ‘aggressive’ tax avoidance with a view to arguing their equivalence from a moral perspective. This is supported by factual similarities in the offshore financial sector, notably their mutual employment of confidentiality-bound trusts and other special purpose vehicles (SPVs). Taking the HSBC case as an example, the research is prompted by the recent debate surrounding the ambiguity of tax avoiding practices of major international banks and MNEs. At international level, regulatory response has translated into the OECD’s Base Erosion Profit Shifting (BEPS) Project and the Common Reporting Standard (CRS) for automatic exchange of information (AEOI). In the UK, the introduction of a new ‘offshore tax evasion’ offence is currently being proposed by the HMRC. The paper first considers the taxonomy of tax avoidance, arguing the equivalence of ‘aggressive’ tax avoidance with evasion from a moral and regulatory perspective. The second section compares offshore evasion with aggressive tax avoidance arrangements and discusses the case of HSBC. The final section concludes with a consideration of the effectiveness of anti-evasion and avoidance measures.

Keywords: Offshore evasion, aggressive tax avoidance, taxation, SPVs, financial sector, confidentiality, banking secrecy, HSBC, Google, BEPS, CRS, AEOI

Suggested Citation

Nicolescu, Iulia, The Relationship between Offshore Evasion and ‘Aggressive’ Tax Avoidance Arrangements: The HSBC Case (March 18, 2016). Financial Regulation International (Informa Law), 2016. Available at SSRN:

Iulia Nicolescu (Contact Author)

University of Warwick - School of Law ( email )

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Coventry CV4 7AL, CV4 7AL
United Kingdom

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