Re-Mapping the Geography of Tax Avoidance: Tax Professionals as the Nexus between Onshore and Offshore

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Abstrakt

Tax avoidance by multinational corporations and high net-worth individuals has gathered public, political, and academic attention in the last decade. Tax avoidance takes place through the dissociation of the legal geography of capital (offshore) from the actual geography of owners, managers, and production (onshore). This onshore-offshore dissociation is created by tax professionals, who act as the intermediaries between the two sides of the economy. While it is recognized that not all “non-tax spaces” (Wainwright 2013) are placed “offshore”, the overwhelming focus in the literature on the geography of tax is on “offshore financial centers”, seen as a tucked-away entity complementing “international financial centers” (Wojcik 2013, Roberts 1995). These contributions however map the legal geographies of tax, and do not map the geographies of where this tax avoidance is coordinated, maintained and facilitated from. We map the professional and social geographies of tax avoidance work and show that this has a distinct pattern from the geographies of where assets are placed through legal structures.
As globalization has removed the actual frictions of space, the legal differences across space become more important as they increase opportunities for regulatory arbitrage (Harvey in Roberts 1995). These complex systems of geographical arbitrage require management by skilled tax professionals. Tax professionals are lawyers, wealth managers, consultants and accountants with an expertise in the highly technical fields of international tax law, corporate taxation and accountancy, and wealth protection (OECD 2008, Harrington 2017, OECD 2018). It is estimated that they are involved in the shifting of profits to the scale of US $600 billion to US $1 trillion annually (see e.g. OECD, 2015; Clausing, 2016; Tørsløv, Wier, and Zucman, 2018; Janský and Palanský, 2017). The methods in terms of legal strategies vary (and change over time), and distinct ecologies of tax professionals can be observed with different practices and products depending on the type of corporate or individual clients they serve (Beaverstock, Hall and Wainwright 2013).
Here, we investigate empirically the global distribution of tax professionals by developing a novel methodology leveraging the social media LinkedIn. We find that tax professionals are concentrated in global cities in close proximity to corporate management and financial firms, rather than in offshore tax havens. Our approach allows us to estimate the most important jurisdictions from which tax avoidance is orchestrated, and opens new avenues for regulation by showing that tax avoidance is orchestrated from developed countries, and not from small-island tax havens.
OriginalsprogEngelsk
Publikationsdato2020
StatusUdgivet - 2020
BegivenhedSASE 32nd Annual Conference 2020 - Virtual Conference: Development Today: Accumulation, Surveillance, Redistribution - Virtual, Amsterdam, Holland
Varighed: 18 jul. 202021 jul. 2021
Konferencens nummer: 32
https://sase.confex.com/sase/2020/meetingapp.cgi/Home/0
https://sase.org/event/2020-amsterdam/

Konference

KonferenceSASE 32nd Annual Conference 2020 - Virtual Conference
Nummer32
LokationVirtual
LandHolland
ByAmsterdam
Periode18/07/202021/07/2021
Internetadresse

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