This paper investigates the extent of cryptocurrency investment in Norway. First, we use Norwegian tax records to investigate the cryptocurrency portfolios reported for tax purposes. All Norwegian taxpayers are obliged to report the market value of their cryptocurrency at year-end. The tax records reveal that almost 1 percent of Norwegian taxpayers declare owning cryptocurrencies. We show that, although distinctly younger, cryptocurrency owners are similar to owners of other kinds of assets in terms of wealth. Nonetheless, as cryptocurrencies are self-reported, the figures observed in tax returns are likely under-reported. In the second part of the paper, we attempt to account for this by merging tax record abstracts of all Norwegian taxpayers in 2021 with the list of depositors on the cryptocurrency platform Celsius as of April 2022. Less than half of the Norwegian taxpayers with a Celsius account reported any cryptocurrency wealth to the tax administration three months prior.

Here we introduce the largest and most detailed dataset to date of long-term change in the global IFF regulatory landscape—the Regulation of Illicit Financial Flows (RIFF) dataset. Compiled with support from the UK FCDO GI-ACE program, and assistance from the FSI team at the Tax Justice Network, the RIFF provides annual data on 22 regulatory indicators, in 61 key jurisdictions, for 1990-2020. Analyzing this new world map of long-term IFF regulatory change, we find evidence of broad international regulatory convergence, across offshore jurisdictions and OECD countries, in AML/CFT compliance and international information exchange. However, these areas of convergence are layered on top of a persistent offshore-onshore divide in statutory banking secrecy, and the scope and accessibility of beneficial ownership data, wherein lapses also persist in key OECD members. This is likely to have a particular impact on the investigative efforts of non-governmental actors, including journalists and civil society organizations.

Cryptocurrencies pose a new threat to tax enforcement. Their anonymous nature leaves tax authorities with few enforcement tools. In this paper, we provide the first direct evidence of cryptocurrency owner characteristics by matching transaction data from cryptocurrency platforms with tax records. We find a tax non-compliance of 93% and behavioral effects of increased tax enforcement.

We present direct evidence that firms serve as tax-free consumption vehicles. Drawing on a unique combination of data from an electronic invoicing program in Portugal (“e-Fatura”) we show that individuals who control firms shift 36% of their monthly personal expenditures to firms and 31% of their household expenditures. The effects are driven by owner-managers of small closely-held firms through expenditure categories that lie on the border between business and final consumption, but spread among business managers all over the income distribution. Our results suggest that government revenue losses due to consumption through the firm amount to 1% of the GDP. Reallocating tax savings and personal expenditures hidden within firms to reported household income of business managers increases the Gini by one percentage point, and the top 1% income share by half percentage point.