H26 - Tax Evasion and AvoidanceReturn

The article focuses on the reasons for the adoption and implementation of the ATAD. The main objective of the article is then to analyse the impact of this directive on corporate tax revenues in the European Union. The analysis was conducted using the statistical method of the test of the consistency of means, which is a method that allows two samples to be compared with each other, and the years examined were 2018 and 2021. For the international comparison of corporate tax revenues, two indicators are used, namely the corporate tax quota and the share of corporate tax on total tax revenues, and both of these indicators were used for the analysis. In the case of the test carried out using the corporate tax quota indicator, the impact of the introduction of the ATAD on corporate tax revenues in the EU was not demonstrated. The test using the indicator for the share of corporate tax in total tax revenue also failed to show an effect of the introduction of ATAD on EU corporate tax revenue. Using the statistical method of the test of the consistency of means, the effect of ATAD on EU corporate tax revenue was not proven.

This article discusses the tax implications of choosing a property acquisition method for real estate funds. As part of the analysis of real estate investment methods, data from 49 real estate funds registered with the Czech National Bank were processed. An analysis of the assets held and the type of returns of individual funds revealed that the most common method of investing in real estate is lending to a subsidiary real estate company. This method of real estate acquisition is based on the accounting effects of revaluation of assets in mergers of an acquisition company established by the fund and an acquired real estate company. At the same time, it is a method that maximizes the tax optimization of the participants and its choice could be assessed as purposeful in order to obtain a tax advantage.

The article discusses the importance of the Svarc system and its impact on tax revenues in the Czech Republic. According to Czech case law, part of the income is legally taxed in the partial tax base on income from independent activity, although it should rather be income from dependent activity. This is a main feature of the Czech tax system, and it has impact on Czech public finance. Tax revenues of individuals in the Czech Republic are driven mainly by dependent activity, i.e., income from employment. For the analysis, a method was chosen that focuses on the share of self-employed persons without employees in the working age population, according to the economic branches of NACE. The aim of the article was to identify the economic sectors in which, according to Eurostat data, the Svarc system is being overused and subsequently, the lost personal income tax and social security and health insurance from employment were estimated. The total estimate of such tax gap is CZK 14.4 billion.

The paper describes the influence of a tax law on the technical reserves recorded by the Czech and Slovak insurance companies. Specifically using technical reserves to insurance payments respectively to liabilities ratio it verifies whether the rules covered by the respective tax law might have influence the values of the technical reserves created. The Czech and Slovak insurance companies were chosen due to their different tax regime for the whole analyzed period (2010 – 2018). Whereas the Slovakia linked the amount of tax deductible technical reserves to the Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009, the Czech tax law allowed to deduct from the corporate income tax base any value reasonably justifiable. The results of the statistical analysis indicate influence of the tax regime of the technical reserves deductibility as the Czech insurance companies were achieving significantly higher values of the technical reserves to insurance payment ratio in comparison to the Slovak insurance companies where the tax regime had been stricter.

The article deals with the factors that affect the tax morale of the population of the Visegrad Four countries, i.e. Poland, Hungary, Slovakia and the Czech Republic. The evaluation of the answers of the respondents of the European Values Study to the question of whether they justify tax evasion serves as an indicator of tax morale. The authors work on the one hand with the frequency of answers expressing a complete rejection of fraud and on the other hand with average answers on a scale from 1 to 10. Respondents from Slovakia were found to be justifying tax fraud the most, and Polish and Hungarian residents agreed with tax evasion the least. Furthermore, the dependence of tax morale on gender, religion and satisfaction with the political system was analysed. Using contingency tables, it was found that all the monitored factors have a statistically significant effect on the tendency of people to justify tax evasion. The only exceptions were the factor of religion in the Czech Republic and the influence of satisfaction with the political system in Poland, where the relationship with tax morale was not confirmed.

The article is focused on genesis of behavioral economics and its applicability within public finance. Behavioral economics is being recently very popular and recognised by academic community as Nobel Prize was awarded to its promoters twice in current millennium. The document is divided in three parts, where one is devoted to overview of the theory, second contains recent trends in described theory and the last one presents case studies from United Kingdom and Poland. The theoretical part describes the basic concepts and theories in relation within historical context. The second part analyses applicability of such theory in public finance and current trends and finally, third chapter contains case studies, where the presented theory is applied in practice with remarkable results.

The aim of this paper is to discuss approaches to estimating the tax gap and to compare the results of these estimates with official estimates of the Ministry of Finance of the Czech Republic. The paper also discussed the issue of tax evasion and instruments used in fight against them, especially with regard to the new Czech legislation - registration of sales.

This article explains behavior of fiscal deceiver who is aversive to a risk as rational and economic behavior. This fiscal deceiver contemplates and costs against possible utility during the tampering of the law (tax) standards. Within this article is the decision making of the fiscal deceiver demonstrated in four simple model examples. The main objective of this paper is to show by using model examples the behavior of individuals at risk in the context of paying taxes and to draw appropriate measures from these examples to increase tax collection (thus reducing the advantages of tax evasion and increase its detection). As an appropriate and effective measures can be recommended the increase of fines and restrictions on registration in Prague. To increase the frequency of tax audits and the implementation of general measures, such as inspection reports, is certainly not a good idea because it is expensive for tax payers and the state.

The article presents the system of indicators for evaluation of taxation of international companies active in the Czech Republic. Based on the identification of the potential channels of corporate tax base erosion and profit shifting of multinational enterprises it enables to recognize companies whose taxation policy might not be in line with the best practice. Extreme values of the indicators might initiate further examination of a company by state authorities. This research thus complements the existing set of analytical tools of the government agencies and research institutions in the area of taxation of multinational enterprises.

We review some relevant literature in the field of tax evasion avoidance proposals. Unfortunately legislative a political conditions (double taxation treaties, tax competition) prevent some of the most useful designs proposed in the scholar literature, to be widely used in Europe. Then we concentrated on properties of transfer pricing rules proposed by OECD guidelines - Cost+ method, comparable resale price method (CRP), profit split method (PSM), comparable uncontrolled price method. We used neoclassical microeconomic model of firm a simulation tools (random cost a income functions). We found that some of these methods (PSM, CRP with fixed discount) cause quite large distortions in the optimal quantity of final good (a therefore also intermediate product) produced. PSM also falls short on the instability of profitability between related industries in time. The most inconvenient property of Cost+ a CRP, which do not distort quantity produced by MNE if percentage markup (discount) is used, is that they are very sensitive to quality of database revenue authority uses, to stability of prices within industry a to profit margin. VAT or turnover taxes are naturally less sensitive, so emphasis on VAT might be a partial solution of multinationals' pricing problem.