Are international deposits tax-driven

This paper investigates the impact of tax policy on international depositing. Non-bank international deposits are shown to be positively related to interest income taxes and to the presence of domestic bank interest reporting. This suggests that international deposits are in part intended to facilitate tax evasion. At present, only part of international interest flow are covered by either non-resident interest withholding taxes or international exchange of information. This incomplete coverage may be a reason that these policies currently appear to have little impact on international depositing. © 2003 Elsevier B.V. All rights reserved.SCOPUS: ar.j