Automatic Exchange Research Articles

Is neoliberalism still spreading? The impact of international cooperation on capital taxation

The downward trend in capital taxes since the 1980s has recently reversed for personal capital income. At the same time, it continued for corporate profits. Why have these tax rates diverged after a long period of parallel decline? We argue that the answer lies in different levels of change in the fights against tax evasion and tax avoidance. The fight against evasion by households progressed significantly since 2009, culminating in the multilateral adoption of automatic exchange of information (AEI). In contrast, international efforts against base erosion and profit shifting (BEPS) failed to curb tax avoidance by corporations. We theorize that international cooperation is an intervening variable, countering the negative impact of tax competition on capital taxation by reducing the risk of capital flight. Under such conditions, domestic political pressures in favor of higher capital taxes can unfold. We confirm our argument in a difference-in-difference analysis and through additional tests with data for up to 35 OECD countries from 2000–2017. Our central estimate suggests that the average tax rate on dividends in 2017 is 4.5 percentage points higher than it would have been absent international tax cooperation.

Results of tax transparency standards implementation in the Organization of economic cooperation and development

The study subject is the measures of suppression so called «Harmful tax competition» process and the world financial system transparency increasing, as well as international taxation rules transparency increasing. These measures are taken by Organization of economic cooperation and development (OECD) and European Union (EU) countries since the mid of 2000. This study describes their main results. The theme of Russian Federation participation in the process of international automatic tax information exchange is touched.Conclusions were drawn about the increase of the level of tax legislation so as to reach the international level in field of compliance. It has done due to implementation of the financial information automatic exchange standard.Also the aspect of inefficiency of the most traditional schemes of international tax optimization in the future are touched. The negative aspects of the international exchange of tax information were also noted.

The Influence of International Tax Policy on the Indonesian Tax Law

By 2012, the Indonesia government had validated Law Number 9 of 2017. One of the content is finance information government access to the customer bank and to the taxpayer. The government has considerations. First of all, Government will be open the access limitation of banking automatically that is necessary for taxation. The second, Indonesia has committed to international agreements of taxation which is obliged to fulfill the commitment. The commitment is to participate in implementing Automatic Exchange of Account Information (AEOI). Based on the policy, several managements and flow process around the banking area changed. Moreover as the customer bank are affected. The registration for the customer bank have been starting since 2018. By the earlier 2019, the progress of the administration needed to be checked and to be evaluated. This paper tries to discuss this issue based on the academic point of view. Data were obtained through library research. The library research was done by documentary study by collecting and analyzing selected laws and regulations, books, articles, journals and other documents which were relevant to the research. All datas were analyzed qualitavely. The implication of this research brings up a new idea about the theory of bank secrets. Initially, it is consisted of two theories, namely are absolute and relative. Despite of the two, there is a big affect in theory and academic knowledge about the validation of the agreement Indonesia government.

ПРОБЛЕМИ РЕФОРМУВАННЯ ФІСКАЛЬНО-ПОДАТКОВОЇ СИСТЕМИ УКРАЇНИ У КОНТЕКСТІ ДЕОФШОРИЗАЦІЇ

The peculiarities of implementation of the Minimum Standard of the BEPS Action Plan in Ukraine, the MLI Multilateral Convention, which provides for separate actions of the BEPS Action Plan, taxation rules of controlled foreign companies (CFC) as well as rules for automatic exchange of information under the CRS standard, are investigated. It was found that rising the effectiveness of existing Ukrainian fiscal-tax system according the de-offshorization of the national economy, double tax treaties with offshore jurisdictions is only possible under the OECD criteria for information transparency of the Ukrainian tax system. The article analyzes the implementation of the concept of CFC into national legislation in connection with the objective need to eliminate the negative consequences of using business offshore schemes. The relationship between national tax and international tax law principles is analyzed on the basis of the ratio of CFC rules, both to the provisions of international tax agreements and to the norms of international legal restrictions. The levels of development of national tax and financial instruments were determined on the basis of international methodological and regulatory approaches to determining the balance between liberalization of national capital markets and systemic financial risks, between optimizing the economic tools for controlling taxation of residents and attracting foreign investors and capital owners, are investigated too. The article analyzes the conditions under which the CFCs are exempt from profit taxation when double taxation treaties are concluding, ensuring timely and complete exchange of tax and financial information between the national fiscal departments. The ways that Ukrainian companies use in low tax zones to restructure their businesses and protect their assets that are not declared in Ukraine are identified. It is about the endorsement by Ukraine of the double taxation treaties for «double tax evasion» (in fact, they do not pay taxes in any of the jurisdictions). The peculiarities of the implementation of the CFC rules as a fiscal component (budget replenishment) and as a regulatory tool to protect and encourage inward investment are investigated separately. Particular attention was paid to the problem of ensuring business security in the context of confidentiality and protection of information while sharing it with other countries in the process of implementing the BEPS plan. It is proved that today the new standards of compliance with the requirements of financial motivate Ukrainian beneficiaries of foreign companies to conduct business under more transparent rules (including the protection of confidentiality of the received information), identify and strengthen weaknesses of business models.

Hidden Treasure

We analyze the impact of exchange of information in tax matters in reducing international tax evasion between 1995 and 2018. Based on bilateral deposit data for 39 reporting countries and more than 200 counterparty jurisdictions, we find that recent automatic exchange of information frameworks reduced foreign-owned deposits in offshore jurisdictions by an average of 25 percent. This effect is statistically significant and, as expected, much larger than the effect of information exchange upon request, which is not significant. Furthermore, to test the sensitivity of our findings, we estimate countries’ offshore status and the impact of information exchange simultaneously using a finite mixture model. The results confirm that automatic (and not upon request) exchange of information impacts cross-border deposits in offshore jurisdictions, which are characterized by low income tax rates and strong financial secrecy.

A Comparative Study on Automatic Financial Exchange between Indonesia and Malaysia

Taxpayer data and information from banking and finance institution could be guidance on any development. Therefore, it could be a corrective act to do the law enforcement on increasing Inland Revenue. Financial information exchange regarded to tax interests, besides by demanding way also could automatically way done (Automatic Exchange of Financial Account Information/AEol). Indonesia commitment was manifested by Multilateral Competent Authority Agreement signed after AEOI on 3rd June 2015. Indonesia agreed to start the financial information exchange automatically on September 2018. The followed-up Indonesia government commitment was on 8th May 2017. It had approved the financial information access no.1 2017 legislations as to tax interests. Then, one year later was set to be no.9 2017 legislations.

Mandatory Automatic Exchange of Information in the Field of Taxation in Relation to Reportable Cross-Border Arrangements. Analysis of the EU Directive 6804/18

The necessity for a mandatory disclosure obligation for intermediaries who project cross-borderschemes for their clients, that involve routing assets to or through offshore entities, is very felt atinternational level, especially in consequence of the recent scandals that highlighted phenomenaof tax evasion/elusion - in particular, “Panama Papers” and “Paradise Papers”. These complexcross-border schemes facilitate tax evasion, tax fraud and money laundering, because each taxjurisdiction evaluates a part of the system within its borders.Considering this scenario, the EU Directive 6804/18 was introduced to provide a set of rulesrelated to the counter of tax avoidance/evasion phenomena and increasing levels of transparencywith regard to the exchange of information between the authorities of the Member States withinthe Union. From the moment of its enforcement, the Directive obliges intermediaries, proposingand commercializing transnational financial schemes to their clients, with the purpose tofacilitate tax avoidance, to report the establishment of such mechanisms to the tax authorities ofthe Member State to which they belong. In turn, the authorities of the aforementioned EUMember States will be compelled, as stated from the Directive, to exchange this information witheach other authorities, in order to increase control over the activities of consultants and taxplanners, regardless of the imminent possibility of a real risk.

CAPITAL, GROWTH AND INEQUALITY IN PIKETTY’S APPROACH. A CRITICAL REVIEW

The paper is a critical review of Piketty’s book “Capital in the XXI Century”. The 950 pages of the French original, and the 696 pages of the English translation, are packed with so many topics, insights, comments and observations that affect almost all spheres of economics, that no single review can summarize them. This review will focus mainly on the factors which can explain the trends regarding the concentration of wealth and of personal income distribution. It will also present some features of the theoretical framework and discuss some of the aspects which can be considered weak from an analytical and methodological point of view. Piketty uses simple economic models to investigate how the ratio between the saving rate and the growth rate of the economy determines the capital-output ratio, and consequently the share of capital in the national income. When the rate of returns on capital rises more quickly than the overall economy and taxes on capital remain low, a vicious circle of ever-growing dynastic wealth, and growing inequality takes place. “Capital is back because low growth is back”. Using the best available historical data, Piketty shows how the capital-output ratio, the capital share in national income, and the rate of return on capital, has evolved over time. Piketty discusses the changes observed, what the main social and economic forces at work are, why these forces change over time, and what we can predict about how the rate of return on capital will evolve in the twenty-first century. The last chapters discuss some policy proposals. Piketty claims that inequality is the result of policies. Only “good” policies can reverse a trend of rising inequality. It is necessary to introduce alternative policies because the composition of wealth is heterogeneous. Piketty suggests a progressive wealth tax on a global scale, based on the automatic exchange of bank information, not only as “useful utopia”, but as a proposal to think about and to discuss. In particular it would be necessary to adopt a progressive taxation on wealth on a worldwide level.

Development and application of online monitoring software for pollutants on oil platforms

The purpose of this study is to improve the efficiency of on-line monitoring of pollutants on oil platform and the economic benefits of oil exploration and development companies. In this study, firstly, several technologies used in the development of this system are introduced, namely, Common Gatew ay Interface (CGI), Active Server Page (ASP), Document Object Model (DOM) and Internet Information Server (IIS). Secondly, the overall structure of oil anti-fouling statistics system is divided into three functional modules: news module, anti-fouling data processing module and user management module. Finally, the overall workflow of the system, user workflow, system security and database are designed. The results show that the system can realize the rapid and automatic exchange and information sharing of system information, and provide information service for related departments. In addition, it can also improve the comprehensive information query ability, and provide leaders and competent departments with the latest information at any time, so as to provide information support for planning and decision-making. Therefore, through this research, it is possible to speed up the collection and processing of information, improve the comprehensive utilization of information resources, and provide a reliable basis for scientific decision-making.

The visibilities and invisibilities of race entangled with forensic DNA phenotyping technology

Forensic DNA phenotyping (FDP) technology represents a set of techniques that aim to predict physical features of criminal suspects, such as eye, skin and hair colour, and also ethnicity through the inference of biogeographic ancestry from their biological samples. In contrast to other forensic technologies, FDP is not used for identification purposes but valued for its potential intelligence value. Since features predicted by FDP relate to common traits shared by different population groups, critical voices highlight that this technology may (re)create dynamics of collectivisation of suspect populations.Looking at the criminal justice system, this paper aims to explore the diverse understandings of FDP by professionals working in forensic laboratories and by the members of police forces, alongside the automatic exchange of genetic profiles to fight cross-border crime. Their perceptions are explored according to the perceived potential investigative value and potential threats of FDP. Furthermore, we discuss how racial issues are implicitly and explicitly present in these narratives. Results show that FDP may be ushering in a new assemblage of racial issues along three entangled dimensions: the differentiating power of externally visible characteristics, the comparison between genetic and eyewitness testimonies, and the collectivisation of suspicion.

Automatic Exchange of Information on Indonesia Jurisdiction in order to Control Business Opportunities

The Automatic Exchange of Information (AEOI) is a product of common reporting standard as a result of Indonesia's ratification of the Convention on Mutual Administrative Assistance in Tax Matters. The convention purpose is to prevent transnational tax evasion and money laudry, with the existence of an automatic exchange of information system through out members of the convention can enact and enforce its laws. The main problems concerning an autamated system is the jurisdiction regarding the enacting state, as well as bank secrecy laws in ratifying countries. With banks are compromised to reveal tax payers information to the state, many tax payers will eventually lose interest in one state and start seeking tax havens, which will impact the economy and business sectors as well as trade policies between states. The purpose of this research is to find out what law governs AEOI in Indonesia and its impact on transnational jurisdiction between ratifying and non-ratifying states. This research is a juridical-emphirical research which uses statute approach, conceptual approach and comparative approach. The research compares Indonesia laws including banking law as well as statistics of Indonesian economic growth since the enactment of tax amnesty as a reaction towards AEOI.

Tax evasion in new disguise? Examining tax havens' international bank deposits

Recent efforts to reduce international tax evasion focus on information exchange with tax havens. Using bilateral bank data for 1397 countrypairs in a balanced quarterly panel from 2003:I to 2017:IV, we first show that information-on-request treaties with tax havens reduce bank deposits in tax havens by 27.5%. Second, also deposits from tax havens in high tax countries decline after such treaties are signed, giving authorities a second angle to detect tax evasion. Both reactions dissipate overt time and treaties signed after 2010 trigger no further reactions. These results cannot be explained by deposit shifting alone and we find no evidence of transitioning into legality. Third, recent policy initiatives based on the automatic exchange of bank information lead to very similar initial reactions as earlier treaties, consistent with adjustments on the part of tax evaders. This suggests that tax evaders adapt to established information exchange treaties by using new disguises to hide their true income, and react again to new measures. These results cast doubt on the effectiveness of current forms of information exchange to tackle international tax evasion.

The Big Bang: Tax Evasion After Automatic Exchange of Information Under FATCA and CRS

ABSTRACT After decades of ineffective attempts to fight tax evasion, the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) recently implemented the first encompassing international exchange of tax-related information on an automatic basis. This is an important development because tax evasion contributes to rising socio-political inequality and political sovereignty losses. This article assesses the treaties’ impact on tax evasion by conducting a difference-in-difference analysis of cross-border asset data. The results show that the treaties are successful. Household assets in tax havens that are not hidden behind corporate identities are estimated to be 67 per cent lower than they would have been without automatic exchange of information. Furthermore, this reduction is not offset by an increase in treaty circumvention using identity concealment or asset shifting to non-compliant jurisdictions. FATCA and CRS thus implement the first effective international cooperation against tax evasion. The results imply that political globalisation is capable to mitigate the political sovereignty losses and rise of inequality caused by economic globalisation.

Legislation of Law Number 9/2017 as Indonesia's Commitment to Automatic Exchange of Financial Information and Comparison to Malaysia’s Commitment

Taxpayer data and information of banking and finance institutions are useful for guidance in giving prediction on any kind of development. A corrective act must be taken as an effort of law enforcement within taxation sector and to increase the Inland Revenue. Financial information exchange concerning on tax interests can be done by both demand and automatic way (Automatic Exchange of Financial Account Information/AEol). This study aimed to know the urgency of Legislations of Law Number 9/2017 as the country allowance increasing effort and how Malaysia's Commitment to Implement Automatically Exchange Information Relating to Financial Accounts (AEoI). Using descriptive qualitative as the methodology, the result showed that Indonesia proved the commitment by signing Multilateral Competent Authority Agreement after AEoI and agreed to start the automatic financial information exchange. It has approved on the Legislation Number1/2017 on financial information access as tax interests which then changed to Legislation Number 9/2017 a year later. Meanwhile, in comparison, Malaysia’s commitment to the AEoI has signed some agreements and committed to exchange information with respect to different types of accounts opened and maintained by the Malaysian financial institutions.

Autonomous in situ measurement of daily courses of the net CO2 exchange rate in a moss from alpine environment ( Short Communication )

Moss-dominated vegetation type is considered one of the the most productive community type in treeless alpine environments in European mountains. In this study, net carbon exchange rate (NCER) of alpine moss Polytrichum commune was measured by automatic CO2 exchange station unit. Samples of mosses were collected in a mountains from the site located above tree line (1420 m a.s.l.), and transferred to Brno, Czech Republic. Then the cluster of moss (23 cm in diameter, 30 cm in depth) including dead parts was placed into open measuring chamber end exposed to local climate for two weeks in autumn 2019. The chamber closed by a transparent lid repeatedly each 20 min and NCER measured by the system. Data on photosynthetically active radiation (PAR), relative air humidity (RH), and moss temperature (T) were recorded as well. Maximum/ minimum dark respiration reached 1.0 and 0.2 mmol (CO2) m-2 s-1. The highest NCER was found - 0.6 mmol (CO2) m-2 s-1 was caused by photosynthesis of moss clump at the temperature within the range of 14.5-17.5°C and 100% of relative air humidity.

The Prüm Decisions as an Aspirational regime: Reviewing a Decade of Cross-Border Exchange and Comparison of Forensic DNA Data

The automatic exchange and comparison of DNA data between national databases to combat terrorism and cross-border crime in the EU area has been facilitated by the 2008 Prüm Decisions. While it was anticipated that all EU Member States would have fulfilled the requirements by August 2011, this has not yet occurred. Once each Member State has implemented the Prüm Decisions, which is expected to occur by spring or summer 2019, the EU Commission is planning on submitting a legislative proposal to amend the Prüm Decisions, possibly broadening its scope both in terms of types of data exchanged and the number of countries involved. Therefore, it is a timely place to review the available literature on the existing data on the cross-border exchange and comparison of DNA. However, due to the limited amount of available data regarding the Prüm regime’s contribution to combating crime and terrorism, this article reviews national DNA databases’ contribution to national criminal justice systems before it turns to the Prüm regime. Outlining how Prüm represents an “aspirational regime” focused on a secure and safe future, we draft recommendations directed towards rendering cross-border exchange of DNA data more transparent and accountable.

Многосторонние инструменты автоматического обмена информацией: выгоды и риски для России (Multilateral Tools for the Automatic Exchange of Information: The Benefits and Risks for Russia)

Russian Abstract: В работе были проанализированы новые инструменты автоматического обмена налоговой информацией, созданные на площадке ОЭСР. Авторами проведен анализ нормативно-правовой базы России на предмет имплементации требований, установленных в Многостороннем соглашении компетентных органов об автоматическом обмене финансово-учетной информацией 2014 г. (CRS MCAA) и Многостороннем соглашении об обмене межстрановыми отчетами 2016 г. (CbC MCAA). Результатом работы стало формирование предложений по использованию инструментов международного автоматического обмена налоговой информацией, созданных на площадке ОЭСР, а также разработка рекомендаций по совершенствованию российского законодательства в области налогового администрирования и налогового обмена. English Abstract: The paper analyzed new tools for the automatic exchange of tax information created at the OECD site. The authors analyzed the regulatory framework of Russia for the implementation of the requirements established in the Multilateral Agreement of Competent Authorities on the Automatic Exchange of Financial Accounting Information 2014 (CRS MCAA) and the Multilateral Agreement on the Exchange of Intercountry Reports 2016 (CbC MCAA). The work resulted in the formation of proposals for the use of tools for international automatic exchange of tax information created at the OECD site, as well as the development of recommendations for improving Russian legislation in the field of tax administration and tax exchange.

The BRICs and International Tax Governance: The Case of Automatic Exchange of Information

ABSTRACT This article investigates the BRICs’ involvement in the adoption of Automatic Exchange of Information (AEoI) by the G20 and the Organisation for Economic Cooperation and Development (OECD) as a major breakthrough in the global fight against tax evasion. Our main questions concern the BRICs’ willingness to accept AEoI, and their agreement to the Western-dominated OECD as its institutional forum. First, we examine the domestic drivers for BRICs’ participation, as their statist model of capitalism reveals strong disincentives to join this regime and the fact that the budgetary consequences of the global financial crisis were less severe than in Western states. We argue that their agreement on AEoI results more from their persistent balance-of-payments vulnerability to illicit capital than from fiscal weakness, while also discussing the possibilities for mock compliance. Second, we review the role of the non-reciprocal US foreign account tax compliance act (FATCA) in shaping the BRICs’ preference for a multilateral AEoI-regime centred around the OECD’s Common Reporting Standard (CRS). Last, we show that the BRICs’ acceptance of the OECD resulted from pragmatic interests and receiving ownership over the process, together with the absence of coercive mechanisms within the CRS-regime that could fundamentally undermine their sovereignty in this domain.

Literature review: Viktoria Wöhrer, Data Protection and Taxpayers’ Rights: Challenges Created by Automatic Exchange of Information, IBFD, 2018

Literature review: Viktoria Wöhrer, Data Protection and Taxpayers’ Rights: Challenges Created by Automatic Exchange of Information, IBFD, 2018

Hidden Treasure: The Impact of Automatic Exchange of Information on Cross-Border Tax Evasion

We analyze the impact of exchange of information in tax matters in reducing international tax evasion between 1995 and 2018. Based on bilateral deposit data for 39 reporting countries and more than 200 counterparty jurisdictions, we find that recent automatic exchange of information frameworks reduced foreign-owned deposits in offshore jurisdictions by an average of 25 percent. This effect is statistically significant and, as expected, much larger than the effect of information exchange upon request, which is not significant. Furthermore, to test the sensitivity of our findings, we estimate countries' offshore status and the impact of information exchange simultaneously using a finite mixture model. The results confirm that automatic (and not upon request) exchange of information impacts cross-border deposits in offshore jurisdictions, which are characterized by low income tax rates and strong financial secrecy.