Tax harmonisation as key element of integration processes.

Abstract

Global trends towards globalization and integration in addition to obvious positive events are associated with certain dangers. National economies have become increasingly interdependent. Thus, measures of economic regulation undertaken by the government of one country affect the economic policies of other countries. As a consequence, political and economic pressure on third parties may occur. Moreover the simplification of tax and customs control can lead to the growth of tax competition and fraudulent schemes with taxes. Subsequently countries will experience the loss of tax revenue, the emergence of internal conflicts and international tensions. The solution to these problems can be found in interaction of national tax systems. Such an interaction of the tax systems of the countries can take several forms: convergence, cooperation, coordination, and harmonization. Each of them has its own features, in particular - in part of sovereign rights limitations and the degree of supranational institutions‟ involvement in the process. As for the taxes harmonization is quite a common kind of interaction between countries. One should clearly distinguish between the harmonization of tax legislation and the tax harmonisation. The first one is the research subject of legal science, whereas the second one is examined by financial and economic sciences. At the same time, they are closely related: tax harmonization leads to changes of tax elements in the countries, and the harmonization of tax legislation reflects these changes in the legal field. In turn, tax harmonization cannot be implemented in practice if it or its provisions are contrary to the regulatory framework in place.Currently, the most vivid example of the tax harmonization is a VAT harmonisation, carried out in the EU. This tax is of significant fiscal importance not only in this international association, but also in more than 50% countries of the world. Thus the EU experience in this regard is useful. Although VAT harmonization in the EU is carried out since 1967, one cannot say that the process is completed. However, further harmonization of the tax is associated with the loss authority and may limit sovereignty of Member Countries. Therefore, at the present stage of EU development VAT harmonization of new Member Countries and the harmonization of corporate and income taxes are in progress. Overall, the experience of VAT harmonization is of a great interest to countries seeking to enter the international associations, as well as for new members of such associations. It provides an opportunity to assess the problems associated with such a process, its advantages and flaws, and to develop plans for the implementation of the certain taxes‟ harmonization within a given association.