thesis_automatic_exchange_of_information.pdf
(5.41 MB, PDF)
… Individuals can also avoid taxes by opening a bank account in a foreign country that has bank secrecy laws. The lack of information would impede the Internal Revenue Service (IRS) from collecting any taxes. It is estimated that this so-called round-tripping tax evasion by U.S. investors leads to an annual tax revenue loss of approximately 1 to 2 billion USD (Hanlon, Maydew, & Thornock, 2015). In order to combat these tax losses, the U.S. has implemented several 5 Finland, France, Spain, Italy, … OECD automatic exchange model and Section 5 will conclude. 3.2 Qualified Intermediaries The Qualified Intermediary system (QI) was introduced in 2001 by the United States. It was an attempt to close the loopholes for American offshores that were round-tripping transactions (Schaller, 2015). In the past, the United States would request information from foreign financial institutions if there were any suspicion of tax evasion or tax fraud. This system was, however, not efficient as the tax authorities … to keep taxes high in order to collect even more revenue, governments can also use taxation as a tool to influence the public behavior. If the government is concerned with the environment, it can increase taxes on cars, which would lead to people buying fewer cars and thus lead to less pollution. If the government wants to increase the amount of research & development being done in its country, it can implement certain tax benefits such as the Dutch innovation box to make it more attractive. If …
