Banks in Tax Havens: First Evidence Based on Country-by-Country Reporting

67 Pages Posted: 21 Aug 2017

See all articles by Vincent Bouvatier

Vincent Bouvatier

University Paris-Est Créteil (UPEC) - ERUDITE

Gunther Capelle-Blancard

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES); PSB Paris School of Business

Anne-Laure Delatte

CNRS

Date Written: August 2017

Abstract

Since the Great Financial Crisis, several scandals have exposed a pervasive light on banks' presence in tax havens. Taking advantage of a new database, this paper provides a quantitative assessment of the importance of tax havens in international banking activity. Using comprehensive individual country-by-country reporting from the largest banks in the European Union, we provide several new insights: 1) The average effect of being a tax haven is an extra presence of foreign affiliates by 168%; 2) For EU banks, the main tax havens are located within Europe: Luxembourg, Isle of Man and Guernsey rank at the top; 3) Attractive tax rates are not sufficient to drive extra activity; 4) But lenient regulatory environment attract extra commercial presence; 4) Banks avoid the most opaque countries with weak governance; 5) The tax savings for EU banks is estimated between Euro 1 billion and Euro 3.6 billion.

Keywords: Tax evasion; International banking; Tax havens; Country-by-country reporting

JEL Classification: F23, G21, H22, H32

Suggested Citation

Bouvatier, Vincent and Capelle-Blancard, Gunther and Delatte, Anne-Laure, Banks in Tax Havens: First Evidence Based on Country-by-Country Reporting (August 2017). CEPR Discussion Paper No. DP12222. Available at SSRN: https://ssrn.com/abstract=3023206

Vincent Bouvatier (Contact Author)

University Paris-Est Créteil (UPEC) - ERUDITE ( email )

Mail des Mèches
61 avenue du Général de Gaulle
Créteil Cedex, 94010
France

Gunther Capelle-Blancard

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES) ( email )

106-112 Boulevard de l'hopital
106-112 Boulevard de l'Hôpital
Paris Cedex 13, 75647
France

PSB Paris School of Business ( email )

59 rue Nationale
Paris, 75013
France

Anne-Laure Delatte

CNRS ( email )

3, rue Michel-Ange
Paris, 75794
France

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