FIGHT AGAINST TAX HAVENS BY EUROPEAN UNION - WHY IT COULD NOT HAVE BEEN TRULY EFFICIENT YET?

Globalization, modern information technologies and international mobility of capital provide opportunities to shift capital and establish companies' seats around the world. The strategy that combines conduit companies and advantages of tax treaties is known as treaty shopping. Several EU Member States did not conclude tax treaties with tax havens countries. However, some other EU countries did. The findings of our analysis of the entire network of bilateral tax treaties concluded by all EU MSs show, that the later countries' tax treaties enable income tax reduction or avoidance also to residents of those EU MSs which did not sign bilateral tax treaties with tax havens. The network of tax treaties with tax havens signed by some EU MSs contributes to erosion of EU MSs' tax bases and government budget revenues. Elimination of tax treaties abuse would require common supranational EU policy in concluding bilateral tax treaties including the selection of treaty partners or adoption of one EU multilateral tax treaty. [ABSTRACT FROM AUTHOR]