Welcome to Skatteforsk - Centre for Tax Research's first seminar of 2025!
This time, we are excited to host Jakob Brounstein who will present his paper titled "The three body problem: Ecuador's tax on tax haven shareholdership"
Join us on Thursday January 23th either on campus or through the teams link below. The seminar is open to all and we hope to see you there!
Venue: Tårnbygningen, room T316, NMBU. Time and date: January 23th, 11:15-12:00. Contact person: Benjamin Gøtestam (benjamin.gotestam@nmbu.no)
Title:
"The three body problem: Ecuador's tax on tax haven shareholdership"
Abstract:
Can a country reduce its exposure to tax havens, and what are the consequences? We analyze the effects of a corporate tax surcharge applied by Ecuador since 2015, to its domestic firms whose owners are in tax havens. This reform was made possible by the prior establishment of an ownership registry in 2012. We compare the behavior of firms with tax haven owners at baseline (``exposed firms''), versus other internationally-owned firms, in a difference-in-differences design. The reform induced 12 percent of exposed firms to reduce their tax haven ownership to zero, by substituting towards foreign non-haven owners. Newly reported owners are more likely to consist of individuals, rather than firms, thus raising beneficial ownership transparency. Exposed firms also increased their corporate tax payments by 15\%, without reducing their employment and investment in Ecuador. Yet, transactions between exposed firms and tax haven parties did not decrease. Overall, the policy which combined a ``flashlight'' (the ownership registry) and a ``stick'' (the tax surcharge) was effective at raising transparency and mitigating corporate tax erosion.
Authors: Jakob Brounstein, Pierre Bachas, and Alex Bajaña
Join through this Teams link. Passcode: Tx7u8CK6 Meeting ID: 329 323 484 848