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There is a large value added tax fraud in the European Union. The current value added tax system is universal as tax is applied to all parties involved in the chain transactions, thus creating a risk of tax losses if one of the parties involved in the chain transaction does not pay tax in good faith. There is the action plan to introduce the definitive value added tax to prevent tax fraud in intra-community transactions. However, in order to ensure normal value added tax administration in all member states, a number of measures are needed to be done. It is necessary to develop a mutual settlement mechanism in cases of intra-community transactions. The aim of this research is to develop a possible solution for the management of tax payments under the definitive value added tax regime. The results of the research show that to manage tax payments, several payment management systems can be used. However, as a solution, a special clearing system could be introduced. Quantitative research methods such as statistical methods were used in order to analyze the situation of tax fraud in EU and its main causes, as well as mathematical modeling methods to analyze the definitive VAT system and to calculate the balance between countries in an example for clearing mechanism.

contaminate the 1st indicator. A more accurate measure of VAT collection efficiency is therefore the c-efficiency ratio. A c-efficiency ratio other than 100% indicates deviation from a single-rate tax on all private consumption. If it is lower, this may be a result of application of exemptions and reduced rates, tax arrears, and tax fraud; if it is higher, this may be caused by inclusion of investment in the VAT base. E = V τ s G D P $$E=\frac{V}{{{\tau }_{s}}GDP}$$ where E is the efficiency ratio, V is the VAT revenue, and tS is the standard VAT rate. The c


There are significant losses in tax revenues across the European Union (EU). National governments lose billions of euros in the revenues from non-paid taxes and other illegal activities. The fight against aggressive tax planning, tax fraud and illegal activities is on the agenda of the EU, OECD and all the national governments. However, due to the size of tax losses it should not be treated just as tax evasion, but rather as tax terrorism! Therefore, the author has set criteria when tax evasion should be named as “tax terrorism” as well as designed the principles for tackling tax terrorism and other ways of non-payment of taxes. The tax evasion could be treated as “tax terrorism” in case of international evasion from taxes by organized groups of persons for criminal purposes as well as when it creates significant losses in government revenues. The term “tax terrorism” would have impact to communication and cause response of society and politics, therefore it would have more social and political consequences.


The main goal of this paper was to identify the main factors determining the performance of the Slovak tax system. For practical reasons, we decided to deal with all of the potentially relevant dimensions that can be included in the theme – from tax policy to tax administration. The paper is based on primary and secondary data; it combines qualitative and quantitative research methods. The primary data were collected in two rounds, with long-term research about the needs perceived by tax officials and with the “Delphi method”. The comparison of the opinions of tax officials and tax experts with the existing evidence serves as the basis for the paper’s conclusions and policy proposals. The research shows that the most important areas mentioned by tax officials and experts are relevant (to simplify tax collection, to decrease tax bureaucracy, to provide better information about the tax system to businesses and citizens and to improve tax administration services). However, the second most frequent answer by tax officials (to decrease the tax burden) is somewhat disputable – the research indicates the existence of some level of tax illusion, even at the level of tax administration professionals. The research also reveals the relatively low priority given to the need to increase the level of risk connected with tax evasion, which is surprising because the data clearly indicate a very high level of tax fraud in the country.


Purpose: Capital flows, tax competition, multinational companies and tax havens weakens governments’ ability to lead independent tax policy. This race to the bottom, especially in the case of CIT rate, seems to work. Aim of the text is to show that the governments are not as powerless as it is often claimed. Despite common opinion, nation­states retain a relatively significant autonomy in creating their own fiscal policies, including tax instruments. Size of funds kept in tax havens have not been growing for few years and international cooperation of tax authorities is more and more efficient in dealing with the tax fraud.

Methodology: The study uses desk research method for theoretical reasoning to verify the research hypothesis. Moreover, the study seeks answering if the application of EU tax policies determines national tax policy. To that end, the authors utilize time series and cause­effect analysis, as well as quantitative research for the systematization of statistical information and regression analysis for the examination of statistical dependencies. Tax competition or the functioning of tax havens naturally limits the realization of the fundamental functions of fiscal policies, although the taxation remains one of the most crucial instruments of macroeconomic and income policy of national authorities.

Findings: The most important data on public revenues structure in different OECD countries indicate that taxation remains one of the most crucial instruments of macroeconomic and income policy of national authorities. We also show that impact of FDI on hosting economy is not as positive as it is said to be. There is no relation between FDI and R&D spending and level of wages in hosting country is even affected in the negative way by the FDI inflow. Irrespective of the regulatory details introduced at the EU level – the basic factor affecting jets coordination in the field of cooperation between tax services brings effects both in terms of the current collection of tax liabilities and the creation of regulations that hinder tax avoidance and under statement assessment.

Originality/value: The study focuses on an analysis of tax policy. The view that taxation of international corporations is fraught with difficulties finds support in the undeniable reality of tax competition. Moreover, a large and growing share of profits is transferred to low­tax places. The prospects for taxing international companies with positive rates seem unoptimistic. Therefore, it is essential to check how the national economy is affected by the FDI inflow in OECD countries.

intelligence unit letter. Retrieved January 21, 2015, from Knight, R. A., Knight, L. G. (1992). Criminal Tax Fraud: An Analytical Review. Mo. L. Rev. 57 (1992): 175. Linder, D. O. (2015). The Al Capone Trial: An Account. Retrieved January 21, 2015, from Nový Cas. (2015). Neuveritelné! Ficove hodinky sú o 19 750 e drahšie ako Obamove! Retrieved January 21, 2015, from

based on revenue body experience. Forum on Tax Administration: Compliance Sub-group. Retrieved from OECD (2017). Tax Administration 2017: Comparative Information on OECD and Other Advanced and Emerging Economies. Paris: OECD Publishing. Retrieved from [19.3.2018] Reckon (2009). Study to quantify and analyse the VAT gap in the EU-25 Member States . Retrieved from

compliance behavior in self-assessment system. African Journal of Business Management 5(33) , 12864-12872. Plumley, A. H. (2002). The Impact of the IRS on Voluntary Tax Compliance: Preliminary Empirical Results. National Tax Association, 95 th Annual Conference of Taxation. Retrieved from Reckon. (2009). Study to quantify and analyze the VAT gap in the EU-25 Member States. Retrieved from OECD. (2014

multi-party computation of Boolean circuits with applications to privacy in on-line marketplaces. In CT-RSA’12 , volume 7178 of LNCS , pages 416–432. Springer, 2012. [26] P. Bogetoft, D. L. Christensen, I. Damgård, M. Geisler, T. Jakobsen, M. Krøigaard, J. D. Nielsen, J. B. Nielsen, K. Nielsen, J. Pagter, M. Schwartzbach, and T. Toft. Secure multiparty computation goes live. In FC’09 , volume 5628 of LNCS , pages 325–343. Springer, 2009. [27] D. Bogdanov, M. Jõemets, S. Siim, and M. Vaht. How the Estonian tax and customs board evaluated a tax fraud detection

Series, WP 16/14. Collier, R.; Kari, S.; Ropponen, O.; Simmler, M. & Todtenhaupt, M. (2018), Dissenting the EU’s Recent Anti-Tax Avoidance Measures: Merits and Problem , EconPol Policy Report, no. 08, vol. 2. Commission Proposal for a Council Directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market, COM(2016) 26 final, 2016/0011 (CNS), 28.1.2016. Communication from the Commission to the European Parliament and Council for an Action plan to strengthen the fight against tax fraud and tax evasion, COM (2012