Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195489 
Year of Publication: 
2017
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 11 [Issue:] 2 [Publisher:] University of Finance and Management in Warsaw, Faculty of Management and Finance [Place:] Warsaw [Year:] 2017 [Pages:] 235-248
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
One of the most serious effects of offshoring is tax avoidance, which harms the economies of the affected regions. In an attempt to eradicate tax avoidance, the EU seeks to establish tax harmonization across its Member States. Based on data for 2006-2014, this study analyzes the historical evolution and current trends of a convergence or divergence of the tax burden for 15 EU Member States. The effective tax rate was used to assess the tax burden. This study used a novel approach to analyze the tax burden and conducted a cluster analysis to examine changes in the effective tax rates between 2006 and 2014. The results imply that when the economy prospers, effective tax rates tend to converge. In contrast, during periods of economic downturns, effective tax rates diverge. This divergence occurs because of differences in Member States' tax policies that reflect the various strategies that are adopted by different Member States to combat economic crises. Therefore, the tax harmonization criteria that were established by the EU are relegated to the background and offshoring is encouraged.
Subjects: 
Offshoring
Tax Convergence
Effective Tax Rate
Tax Burden
JEL: 
H26
H7
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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