The geography of financial secrecy

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This thesis aims to reveal what factors influence the financial secrecy of a jurisdiction. The Financial Secrecy Index 2018 compiled by Tax Justice Network showed that financial secrecy goes much further than the kind of confidentiality that ensures customer’s privacy. Many jurisdictions in the world offer secrecy provisions that allow assets to remain undetected by tax authorities. Financial secrecy is part of an institutional framework that enables countries to become specialized and competitive in offshore finance. But it is unlikely that secrecy provisions have the same effect in all countries because their effectiveness is dependent upon factors that differ across different countries. Second, the desire for a large exporting financial services sector is also unlikely to be the same in all countries and is therefore also dependent upon factors that differ by country. It is these factors that are of interest in this research. To this end a series of potential factors was derived from the literature on tax havens. It was found that sparsely populated jurisdictions tend to score higher on financial secrecy. Second, economic openness has a strong influence on the method used for avoiding double taxation. Third, jurisdictions with common law systems tend to be more secretive.
Faculteit der Managementwetenschappen