Abstract

This note examines the feasibility of using artificial intelligence (“AI”) and international tax policy to address the negative externalities flowing from widespread tax haven use. Tax haven use, which drains hundreds of billions of dollars annually from global tax revenues, exacerbates inequality by enabling wealthy individuals and multinational corporations to evade their fair share of taxation. Current initiatives, including the OECD’s Automatic Exchange of Information (“AEOI”), the U.S. Foreign Account Tax Compliance Act (“FATCA”), and the Common Reporting Standard (“CRS”), have improved financial transparency but remain fragmented and vulnerable to circumvention. Against this backdrop, this note argues for the development of a coordinated, AI-driven global tax reporting and compliance framework capable of systematically uncovering and preventing tax evasion. It explores how governments already use AI to detect fraud, enhance audits, and increase efficiency. Building on these successes, this note proposes a multi-step plan: (1) broad adoption of the global minimum corporate tax (“GMT”), (2) strategic use of incentives and sanctions to ensure compliance, (3) creation of a multinational AI task force to integrate existing frameworks, (4) establishment of an international regulatory body, and (5) implementation of robust deterrence mechanisms. By leveraging AI and international cooperation, this note contends that curbing offshore tax evasion is both technically feasible and politically necessary to restore fairness, strengthen state capacity, and reduce global inequality.

Keywords: artificial intelligence, AI, international tax policy, negative externalities, tax haven, FATCA, CRS, AEOI, OECD’s Automatic Exchange of Information, GMT, fraud