This paper investigates the impact of the Automatic Exchange of Information (AEoI) on tax compliance using French tax records and foreign financial asset data. It first provides an overview of offshore asset ownership among French households, highlighting a concentration of wealth in foreign accounts among the top earners. The study then evaluates a 2019 intervention by the French tax authority, where taxpayers listed in foreign reports were reminded of their reporting obligations, leading to increased compliance across various income groups, except the top 0.01%. The paper also studies the causal effects of AEoI on tax compliance, exploiting the staggered implementation of AEoI across countries to compare taxpayers in early adopter countries with those in late adopter countries.

We document the increasing role of the offshore trusts in international wealth

management. Looking at investment in British real estate, one of the most popular international investment assets, we document a number of descriptive facts. First, the role of direct investment from domestic trusts has been increasing at lower rates in recent years. Second, the offshore trust is starting to become more important in the market, outperforming domestic trusts. Third, this investment exhibits patterns across prices and geography that are more in line with the investment patterns of tax haven shell companies than those of traditional trusts. The offshore trust is highly opaque and not subject to the transparency initiatives that aim at establishing the ultimate ownership of corporate structures. Our results cast doubt on the favourable tax treatment of trusts and the efficiency of international financial regulation which by and large ignores the offshore trust in its reporting requirements.

We assess Euro Area financial integration correcting for the role of “onshore offshore financial centers” (OOFCs) within the Euro Area. The OOFCs of Luxembourg, Ireland, and the Netherlands serve dual roles as both hubs of investment fund intermediation and centers of securities issuance by foreign firms. We provide new estimates of Euro Area countries’ bilateral portfolio investments which look through both roles, attributing the wealth held via investment funds to the underlying holders and linking securities issuance to the ultimate parent firms. Our new estimates show that the Euro Area is less financially integrated than it appears, both within the currency union and vis-à-vis the rest of the world.

This paper characterizes profit shifting behavior across the distribution of multinational groups and thereby provides three sets of results relevant for the recently introduced Global Minimum Tax (GMT). First, we establish the group-size cutoff at which MNEs change their production function to include the ability to engage in aggressive profit shifting. Second, we show how this cutoff coincides with an increase of internal debt within the group. Third, we show that this is connected with a decrease in effective tax rates of the MNE. Finally, we establish an indicator that correlates with our indicators of internal debt and lending to tax haven subsidiaries to allow researchers without access to detailed internal lending data to identify aggressive profit shifters.