Fred Schroyen

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  • International tax information agreements and the use of tax amnesty in Norway
  • Abstract:
    Since 1985, Norway has a permanent tax amnesty arrangement, giving citizens with undeclared income or wealth an opportunity to come forward and reveal their underreporting in exchange for a waiving of the penalty tax. It is only since 2007 that tax evaders have started making use of this voluntary disclosure (VD) possibility.
    In the paper we first develop a dynamic decision model for a tax evader considering a VD application and show that tougher compliance policies can be decomposed into an announcement and implementation effect. We then test the model on VD applications made during the period 2007-2016. The empirical results show strong announcement effects of tax information exchange agreements between Norway and popular tax havens such as Switzerland and Luxembourg. We also find that the bi-annual press releases from the tax authorities on the VD opportunity have a positive effect on the use of the VD clause in the tax law.