SHS Web of Conferences 83, 01041 (2020) Current Problems of the Corporate Sector 2020
https://doi.org/10.1051/shsconf/20208301041
The Economic and Social Consequences of Tax Havens in the World Gizela Lénártová1* 1 University of Economics in Bratislava, Faculty of Business management, Department of Corporate
Finance, Dolnozemská 1, 851 04 Bratislava, Slovak Republic
Abstract. The tax havens in the world have become the global phenomenon related tax avoidance, tax fraud and evasion and money laundering. The aim of the paper is to analyze their scope and to assess economic and social consequences of their existence in the world society, world economy, international and national tax systems. Many analyzes of the current situation and reported cases show that tax havens are threatening the stable development of the world economy, causing negative consequences of the economic, social, security and humanitarian nature of the global scale. Combating tax avoidance, tax fraud and evasion through tax havens must be stronger and more effective all around the world.
1 Introduction Globalization significantly affects all ongoing processes in the world economy, while its positive and negative consequences can be observed throughout society. Piketty [1] has analyzed the current problems of the world economy, examining the causes of inequality, and his former doctoral student Gabriel Zucman [2] has focused on tax havens in the world. Tax havens are used for a variety of purposes, in particular to achieve tax savings, exploit anonymity, and protect assets and hide wealth. Tax savings may or may not mean tax evasion. Sometimes it is about tax avoidance. There is no big difference between them. This depends on the specific jurisdiction, as the concepts of tax evasion and tax avoidance are distinguished in tax legislation and criminal law. Many authors defined a tax evasion as a tax reduction, which is a criminal offense. However, advanced tax jurisdictions consider not only tax evasion but also tax avoidance unacceptable. A series of transactions in which tax legislation is abused leads to unacceptable tax avoidance. Krištofík [3] states that tax savings are among the most common motives for using tax havens, while he further states that the category of taxes (international tax planning and international tax optimization) is often examined from multiple points of view and according to different criteria. According to Graham and Tucker [4], many tax legislative provisions provide incentives or discourage companies from making certain decisions. But some inadequate incentives like a direct support are similar to tax avoidance. According to Ozili [5] factors encouraging tax evasion are: high tax rates, tax evasion sophisticated technologies, weak tax enforcement strategies, inaccurate tax data/records, booming tax avoidance industry, corruption, inadequate *
gizela.lenartova@euba.sk
© The Authors, published by EDP Sciences. This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0 (http://creativecommons.org/licenses/by/4.0/).