26 Pages Posted: 1 Dec 2016
Date Written: November 30, 2016
There are increasing policy concerns that aggressive international tax avoidance and offshore tax evasion significantly reduce government revenues. In particular, for some low income countries the amount of capital flight (where elites move and hide monies offshore in tax havens) exceeds foreign aid. Governments struggle to enforce their tax laws to constrain these actions, but are inhibited by a lack of information concerning international capital flows. The main international policy response to these developments has been to promote global financial transparency through heightened cross-border exchanges of tax information. The paper discusses elements of optimal cross-border tax information exchange laws and policies by focusing on three key challenges: information quality, taxpayer privacy, and enforcement. Relatedly, the paper discusses how the exchange of automatic ‘big tax data’ combined with data analytics can help address the challenges.
Keywords: international tax, exchange of information, internet, bulk information, offshore tax evasion, aggressive international tax planning
JEL Classification: D61, D82, E02, E62, F38, H21, H26, K34, M42
Suggested Citation: Suggested Citation
Cockfield, Arthur J., How Countries Should Share Tax Information (November 30, 2016). Queen's University Legal Research Paper No. 2016-080. Available at SSRN: https://ssrn.com/abstract=2877838