 Ok, well thanks very much. So, we discuss and surrender instructions not to focus obsessively on the papers but to make some general remarks too. So, I am going to allow myself a bit of a rant about something vaguely related to the topic of the session at the end. But I can't resist making maybe one comment on each of the papers. I thought they were all great. I think it's really wonderful to see what impressive work bright young So mae'n gweithio'n gweithio ar gyfer y dyfodol. Felly rydyn ni'n bod i'r aw кого yw'r fawr. Ond rydyn ni'n gweithio'n gweithio'n gweithio. Mae yna gweithio'n gweithio'n gweithio'n gweithio. Rydyn ni'n gwneud hynny o'r gweithio. Byddwch chi'n gweithio gweithio'r gweithio'n gweithio. Fy gwybod yna bod lwyddon yn ddefnyddio'r gweithio ar y newydd. Mae'r gweithio'n gweithio ar gyfer y newydd. If I end a mid sentence, you have to forgive me. So maybe to start with Casper on IFF. Casper won't be surprised to learn that I don't buy. I don't buy the broad interpretation of IFFs. I do think that it's distinguished between things that are legal and that are illegal, matters. Of course we know there's a grey zone, but I think aligning these things is not helpful. I'm not going to worry about what the word illicit means, I would just get rid of it. I would say the same about the other phrase that I equally dislike, which is tax dodging. What on earth is that? Let me go through the reasons, although that's on my missing page of notes. When it's causing clearly matters for what you think the response should be, is it a compliance issue or is it a policy design and a compliance issue? I think it doesn't help us, we do a bad job explaining these issues to the public. I think it makes our job even harder if we don't actually explain if something's legal or not. I think when people see multinationals paying low amounts of taxation, they need to know why is that. They need to know these are the rules. The rules say that if you don't have a physical presence, you're not going to pay tax. So I don't think we do the public any service at all by doing this. I think without such a, when we use this distinction, if we don't make this illegal distinction, we just lose any kind of compass on this stuff. We have to say, well, this is good tax avoidance because they're responding to incentive we want to respond to. But no, this is bad tax avoidance because you didn't really want them to do that. And I think, again, Casper referred to it, values change. Marijuana. Marijuana has become a bigger revenue source in many countries. Has it suddenly become licit when it was illicit before? Well, in that case, you're using a legal definition. Or was it licit all the way through and that was, or has it, was it illicit all the way through? Your left was imposing your judgments on these things. So I know, Casper, I suspect I'm in a minority of one, but I certainly wish the IMF and OECD in particular good health in trying to limit the use of the phrase. But again, that wasn't my rant, by the way. I have another rant coming. Second, Domenica, I thought it's a very nice idea of having these interactions between cross companies being introduced by CPCR. The one point that I found myself thinking about was these audit costs because I didn't get why the audit costs, they didn't seem to depend on the tax rate in the particular country. Maybe I'm wrong, but they just kind of, and I would have thought, you know, if these are ex-post costs, I would think they would depend on what's the probability, you know, what's the probability you're going to have to make some adjustment. So then, and maybe that doesn't make any difference, but I would think that, well, we're going into things not in the presentation, but the theta ray should somehow depend on the tax rate in that country. But I may be misreading the model, but I thought it was a very nice way of going about things. For Jacob and Joe, I'm going to fall back on the discussant's remark of saying what are the policy implications. I think for Jacob, and I know it's in the paper, more on the kind of tax nerdy details of this, and I was going to look at the paper last night, but CEPR wanted to charge me £6, and I thought I wasn't going to do that. But I think, you know, partly my impression is that in the UK, it's become tougher towards non-resident ownership property over the years, and it's somewhat started, didn't it start more or less before Brexit? I know there was more later. And I think the two issues are, well, are we saying there should be a special tax on non-residents as some countries have? What do we think that would do? The more complicated question, I think, is to do with what I think is behind these corporate structures is this issue of indirect transfers of ownership, where you basically hold a property in London through a chain and then you realise the capital gain and a low tax jurisdiction. But I think the UK is now fairly tough on, so I don't know if we're saying there should be tougher. And actually there are some real issues as to how you should tax those transfers. The hardest paper I ever wrote was a paper we did at the fund on exactly this issue, in taxation of indirect transfers of interest. It's super hard. Conceptually, because you're talking about levying a tax on capital gains related to something that's going to pay a tax on capital gains in the future. It's kind of a deferral issue. So I know that's not the point of the paper, but I'd be curious to know more about that at some point. And for John, I mean, I thought it was, again, very, very nice. I thought the interesting part was towards the end where you think about these... Well, I should say perhaps I was delighted by what you said about reporting magnitudes. I think that's very true. I think it's not just true for kinks. I think it's true for nudges, all kinds of things. You look at the numbers, you have a wonderful experiment, hugely significant. You think, well, wow, what does this mean for revenues? And kind of point that away with something or other. Or strength you on that one. But I mean, I think the question at the end of... In some sense, I'm not quite sure you could think of it as somehow moving these people kind of by force beyond the kink. In some sense, it's to do with whether you want that kink at all or whether you kind of want the kink higher up. If everybody is going to move, why don't you just put the kink lower down, in which case why don't you just have a flat tax or whatever. So I think there are these design issues as well as they're going to brute force things. But if I have a few more minutes, let me come to my rant, which is simply taken from the title of this session, Tax Havens. And I know John had nothing to do with Tax Havens, but the word Tax Havens appeared in other places. And I start from this by saying from very bitter experience I know that many countries find this term derogatory. And I think at a time where we try to avoid being gratuitously derogatory, we should think about that. And I should say I speak from bitter experience, I've been hauled into many meetings where I've been trying to defend the use of the term Tax Havens. Let me now try and step back and perhaps give some thoughts in the opposite direction. What do these countries say when they express their upset of being called Tax Havens? One is they say we have lots of other non-tax attractions. We're well governed, good regulatory systems. Okay, fair enough, but we know tax matters. So let's not give them too much credit on that one. The other thing they say, of course, is what the lawyers call the two-quo-quay argument. Well, everybody else does it. We're not the worst. There's the UK, which used to have these exemptions for non-resistant investment property in the UK. Why pick on us? We're just rather more open about it, perhaps. What about Delaware? Why don't you think, well, okay, it's hard to completely disagree with that. So then you think, well, let's focus on particular bad practices, not on countries, which is what the OECD did in the outset of this project in 1998. Of course, that doesn't work for a number of reasons. That doesn't get you around the problem of zero taxes. Also, we know theoretically that actually having preferential regimes, giving preferential treatment for some things, can actually be beneficial in terms of how tax competition games work out. So what do they say then? Then they say it's our sovereign right to do whatever we want, and we can't help it if the rest of the world is filled with crooks who take advantage of the schemes that we offer in all honesty. Well, of course, there's a kind of aiding and abetting argument there. But it does focus attention, I think, on two key questions. One is that all this is ultimately a kind of a coordination problem. And normally when we think of coordination problems, at least we should be thinking if there's an inefficiency everybody can gain. It's actually supposed to be Pareto improving when we deal with coordination problems. That's what we should be aiming at. I'll offer when we write down models, and I'm not mentioning any, not thinking of any of the ones here. People often write down models and say, well, yeah, the low tax havens lose out, but there's an aggregate gain, so who cares? I think that's really not good enough. We have to be a little bit more thoughtful in how we think about coordination issues, which is why I'm quite interested in things like what a minimum tax does, whether that has potential benefits for even ones forced to raise their tax rates. And I think this is more or less where I'll finish, is the other thing that focuses attention is, well, why did high countries tolerate tax savings? They could have closed down these low-tax jurisdictions, whatever we're going to call them, ages ago. They had enough power to do that. Why didn't they do it? Clearly it makes you think, well, there are elites involved. The question then is, well, are those elites still there? Why has there been this kind of change of attitude, seemed to begin with the global financial crisis, which was odd because nobody thought that tax savings had much to do with the global financial crisis. I think it's to do with kind of a lot of excellent work by civil society organisations. A little bit the need for revenue, but perhaps not so much when we look at the very little amount of money that's at stake in pillars one and two. So I'm not going to go on to argue that low-tax jurisdictions are actually a good thing. Of course there are people who would, and there are arguments you can make about that. But I think this is where my notes leave me bereft of my wonderful closing sentence. But it was basically, of course I've chosen this rant to try and be provocative, but I think sometimes we might want to think a bit more, what do we really mean by tax savings and how do we actually think about them in welfare terms as we think about reforming the tax system. I think it's too easy to dismiss them as kind of pariahs and who cares. But as I say, I've argued the opposite many occasions, but that's the argument I'm making today. So thank you very much, and great papers, and enjoy them all. Thank you very much, thank you. Thank you very much, Mick. I'm supposed to now ask the presenters to join the high table, but what I'm going to suggest instead is that you stay where you are, but that you turn around and speak to the audience when you get the mic. I think that's probably going to be a little bit more efficient. We don't have very much time. I will, though, just very quickly that the mic pass around the speakers just to hear whether you have any reaction to make first, and then we'll get to the other questions. No, I think the discussion was great. Obviously we don't really agree on whether to use the broad and narrow definition, but that's fine. Yeah, thanks. I also really enjoyed the discussion. I also don't want to say anything about what you said about my paywall. You have a lot of good points. There's another version online that's remarkably similar to the one behind the paywall. About the tax haven issue. So the British Virgin Islands have 30,000 inhabitants and 400,000 registered companies. They are investing 20% or 15% of the foreign investment in British real estate comes from these 30,000 inhabitants. That is a tax haven. I'm not saying that there is not anything, and what I completely agree with is the point that the boundary between tax havens and known havens is becoming more and more blurry, and more and more policies are being adopted in large OECD economies, Delaware as a good example, but also Golden Visa schemes, Dominica is a great paper on that, or Citizenship Investment, all kinds of kind of... These kind of policies are being implemented in OECD countries all over the planet, I agree with that. But there are also still pretty obvious tax havens. The reason I am assisting on the mic is because the virtue of participants cannot follow if we don't speak into the mic. So there's somebody here in the back. And then I can see you from here. And then I will basically move up through the room. We will collect some questions and then get reactions. Thank you. I had a question for Dominica. So the model predicts that overall global profit shifting should fall, right? And I'm not sure how much you short about this. And I also know that you know the update on the Vier-Zookman paper you cite if anything shows more profit shifting in the last five years. So I'm a bit wondering how you, you know, how we rationalize these two things. Okay, Dominica, you will take note. And then next hand, here in the back, okay. Also the same question, like also the question about the same paper. What do you do with companies that actually manipulated like across the threshold? You got the question? Yeah, okay. Okay, number one here. Thanks. I was actually really interested in John's paper, though it's a little bit off the topic, the other ones. But to John, because I've also seen a number of papers that look at the same kind of bunching effect but on businesses and particularly informal enterprises that are kind of self-reporting up to a threshold where they're paying a gross tax versus a profit tax. How do you think your results compared to them? Have you looked at them? I think there might be a lot more revenue there. And that might be a really interesting place. And I think that's why your study is interesting because it might point to where audit resources should be going more effectively. And I think that's where we can be looking there. And then one quick comment just about the first paper. I mean, just, I work at the UN. I'm Peter Chawla. I'm at Dessa. I should say clearly that, I mean, the UN does support the wider definition. That's not a choice of the secretariat. That's a choice of member states. The UN Statistical Commission has officially endorsed the wider definition in its statistical methodology for estimating IFF. So it's a choice by member states that they've had consensus on. I just wanted to comment on that. Thanks. I have comments on everything, but I'll try and be disciplined. John, I think you're non-result. You will try. You will be. I will because Finn is here. I think your non-result is a real result. We very often hear people pushing back that we shouldn't worry about profit-shifting for low-income countries. The key thing is getting their tax system sorted out. I think demonstrating the scale or the non-scale of that issue is very powerful. I think you might find that Zambia compares extremely well to quite a lot of high-income countries, and that's a result too. So I would really encourage you to push that. Jacob, on your paper, we've talked about other bits of it before, but I really like the comparison with Switzerland. You've tempted to say, can you test something there? So firstly, can you look at the scale of abuse through the Swiss and the UK or potential abuse, as it were, and say, is the UK basically at the cheap end of the market? Is it attracting illicit flows from lower-income countries because it allows you to do it with a lower amount of money? And or, alternatively, is it something else? Is it UK empire? Is it the history of that? If you could test those two things. Last point to Dominica. I think your paper, in some ways, your disappointing result on lower- and middle-income countries, is, again, the most positive result. It's the one that we'd expect. When we put forward country by country reporting, the idea was that it would be public, and we're going to get there, we will get there, and then the benefits will be disproportionately towards the countries that lose most lower-income countries. But at the moment, because it's not just tax authorities, but has this very complex information exchange thing that only benefits OECD members, what we've said is that we expect this to worsen the inequalities in taxing rights facing lower-income countries, and that's what your finding says. Subject to the caveat that all this is absolutely terrible, but to the extent that we can buy the result, I think it's what we'd expect, so it's a good result. All right, I'll limit it to one question, but I must say that all papers were very interesting, so thank you for your presentations. My question will be for Jacob. It's a very interesting paper as to real estate ownership, and you probably have reflected what could explain the increase after 2015, and I would like to hear a bit more about that, and also whether you have reflected on the implications of your study, on some of the work that the UK is doing domestically, meaning we know the annual tax on envelope developments, which was introduced by the UK precisely to limit this type of practices so that high-value properties would not be held by so-corporate structures, and obviously that tax has been increasing throughout more or less the period that you're looking at. Have you tried to look at those interactions? I know it was not your main question, but I think it could have very interesting light on domestic tax policies, and also the more recent development on the register of overseas entities or when UK properties, because that can bring you some light on the weather transparency part, place role in this practice, like the incentive to put the corporate structure in between. Thank you very much. Okay, then Jacob. Thank you very much for the points. So to Alex's point, can we test the Swiss versus the real estate channel? I think so, but I have to think about it a bit more. But I think there is work to be done to figure out what exactly these different tax haven assets are doing, who's using which for what reasons. My hunches are less scrutiny in real estate, so easier access or like there has been less action to tackle real estate than there has been to tackle tax haven bank accounts which also answers part of Angela's question. So that's my hunch, but we haven't done any work in that direction yet. That's an interesting suggestion. Thank you. Yes, the UK has been doing a lot domestically and the tax results I couldn't go through due to time reasons in the paper are looking at one of these changes. So the UK has bit by bit extended capital gains taxation to foreigners, first foreign individuals, then foreign companies, then closely held companies that are property rich and that's actually a change that we exploit to become pretty difficult to carry out capital gains taxation evasion in Britain if you're a Brit or to get around the British capital gains taxation here. We see that people react to that pretty quickly because there was a little loophole with Luxembourg that was forgotten and then all the investment moved into Luxembourg and we show that. That's not all the story though, right? Because the foreign investor from a developing economy from wherever also might have to pay capital gains taxes and so it's not exactly clear what happens with that and it's much harder for us to test that because we can only do that when we mesh through the entire ownership chains. The same is true for the ATAT, the annual tax on envelop dwellings. Unfortunately that's pretty early in our sample when it gets introduced so we looked at it. It looks like it has an effect but it's when our real-time data starts so we just weren't that sure about that empirically. Yeah, you're right. There's lots of work that could be done with this data. So far we thought the tax part, the fact that it's tax sensitive, is maybe not the most interesting. It's more interesting to look at the illicit nature of it but yeah, you're right, you could do more with it. Domestic register transparency, I only checked that for German data. The German transparency register wasn't that successful so just using Orbis without even using the leaks we were already better at looking through ownership in the German data than the German transparency register for the few cases we drew. We haven't done that for the UK but it's an interesting avenue. Thank you. Okay, Dominique. Yeah, thanks for the comments. I'll try to be quick about it. So on the overall change in profit shifting, so I think that's driven way more by changes in business models, the increasing importance of patterns, trademarks changing business models and country by country reporting obviously. I think that's where all the empirical evidence agrees has not been a game changer as it is today against profit shifting. So in our empirical design, I mean this is, it's diff in diff so we basically control for the increase in profit shifting and then look at differential trends among affected and non-affected firms. And yeah, manipulation around the threshold is a good question. It's the reason we do diff in diff and not regression discontinuity as some of the literature does. So I think it's less of a problem but we do need to think about it a bit more on what to do about it. Will public country by country reporting be better? I think a lot of things are changing, right? I mean minimum tax, global minimum tax will come with some publication requirements. I think that works better than the country by country reporting to be honest. It might help because the, if you take our model seriously, the problem arises because the tax authority looks at the tax haven profits and not at domestic taxes paid. But the backlash in the public when it's published will be about, I think, about too little taxes being paid domestically and not so much about the tax haven. And if that's true, then you're right, making it public might really make it more effective. Yeah. We'll see, I think, in two years or three years whether that's true. Thank you. John? Thank you for the comments. The firms versus people or individuals. As far as I can read the literature, we are finding, at least in the South African case where I've also done some of the work, we actually get these sharp responses, immediate responses that could reflect that it's not really behavioural changes but these immediate shocks, as we also find. So I would expect not to get the big effect in South African firms as well. In other countries, I have to say I haven't done, redone the estimates. I'm not so sure. I think it's a mixed bunch of results. We are going to do it in Sambia and we were actually starting out with the firms. But just to be clear, we need to do much more work with the revenue authorities in Sambia because at the moment we have way too few firms in the data. So there might be some compliance issues we need to look for first before we look into the issue of munching. Okay. Thank you very much to the presenters. Thank you very much to Mick to the discussion. Thank you very much for excellent questions and I will, over the next 24 hours, I'm going to speculate whether Mick will rant against the terms hidden wealth, profit shifting and tax evasion because these are the... Only one of the three. Because there are two more parallel sessions around these topics plus also a panel tomorrow morning. So thank you very much.