International Tax Competitiveness: Between TAX Optimization and Tax Fairness

Abstract

Goal – this work aims to examine tax competition between countries and the balance between tax optimization and tax fairness. The study focuses on the impact of tax competition on the allocation of foreign investment, capital mobility and the competitive advantage of the economy in the international arena, as well as on the analysis of entrepreneurs’ motivation for tax optimization and its effects on public revenues and tax fairness. Research methodology – the research methodology works on a review of the scientific literature on tax competition, tax and tax optimization. These criteria are analysed on the basis of the analysis of determinants of tax competitiveness and the interaction between tax policy and the economic sphere. Score/results – the results of the analysis of the literature synthesis confirm that the increase in tax competition between countries leads to the transfer of investment allocations and, in the end, contributes to the growth of the competitive advantage of the economy on the international arena. Entrepreneurs seeking tax optimization choose a jurisdiction with the effectiveness of tax applications, and the application has an impact on public revenues and on achieving tax justice. Originality/value – the added value of this work is a new perspective on tax competitiveness and the related issues of tax optimization and tax fairness. The work also includes recommendations for policy makers, businesses and society.