The Impact of International Tax Information Exchange Agreements on the Use of Tax Amnesty: Evidence from Norway

39 Pages Posted: 4 Oct 2019

See all articles by Jonas Andersson

Jonas Andersson

Norwegian School of Economics (NHH) - Department of Business and Management Science

Fred Schroyen

Norwegian School of Economics (NHH) - Department of Economics

Gaute Torsvik

University of Oslo, Dept of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2019

Abstract

In this paper we develop a model for tax amnesty applications in a multi-period setting. One key insight from the model is that applying for amnesty becomes more attractive at the moment when stricter enforcement is announced, even if the implementation of the policy is in the distant future. We use our model to make sense of how international tax information exchange agreements affects voluntary disclosure of wealth and income previously hidden in tax havens. Our data is from Norway. In accordance with the dynamic amnesty model we observe a strong announcement effect of a tax information exchange agreement between Norway and Switzerland and Luxembourg, the two most important tax havens for Norwegian tax evaders. However, the effect levels off very quickly, much faster than our model predicts. We think this is because the initial announcement of the tax agreement exaggerated the risk the agreement imposed to those who had hidden taxable income and wealth in Switzerland. We also estimate and find significant effects of the press releases the Norwegian Tax Authority issues to inform taxpayers about new international tax agreements and the amnesty, or voluntary disclosure, option that exists in the Norwegian tax code.

Keywords: Tax Evasion, Tax Amnesty, Tax Information Exchange Agreement

JEL Classification: H26, H27, K34, C22, C23

Suggested Citation

Andersson, Jonas and Schroyen, Fred and Torsvik, Gaute, The Impact of International Tax Information Exchange Agreements on the Use of Tax Amnesty: Evidence from Norway (September 30, 2019). NHH Dept. of Business and Management Science Discussion Paper No. 2019/12, Available at SSRN: https://ssrn.com/abstract=3464252 or http://dx.doi.org/10.2139/ssrn.3464252

Jonas Andersson (Contact Author)

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway

Fred Schroyen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Gaute Torsvik

University of Oslo, Dept of Economics ( email )

Olso
Norway

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