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Institute of Public Finance

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Time to stop avoiding the tax avoidance issue in Croatia? A proposal based on recent developments in the European Union

Stjepan Gadžo, University of Rijeka, Faculty of Law, Rijeka, Croatia
Irena Klemenčić, Institute of Public Finance, Zagreb, Croatia

The paper takes a tax policy perspective in analysing the approach to tax avoidance in Croatia and expounding its existing shortcomings. It is argued that Croatia is yet to develop a coherent legislative framework suitable for curbing tax avoidance in an equitable, efficient and simple way. One instrument that has hitherto been ignored is the general anti-avoidance rule (GAAR), a keystone of anti-avoidance policies in other countries. The authors propose the introduction of a specific GAAR, based on recent developments in the European Union (EU), in Croatian tax legislation. This proposal is supported by multiple tax policy arguments. Special emphasis is placed on the requirements of legal certainty, a traditional weak spot of the Croatian tax system. The proposal is put in the context of the persistent quest for a sustainable public finance system in times of crisis.

Keywords:  tax avoidance; tax abuse; general anti-avoidance rule; GAAR; EU tax law; wholly artificial arrangements; tax policy

Year:  2014   |   Volume:  38   |   Issue:  3   |   Pages:  277 - 302   

Full text (PDF)   |   DOI: 10.3326/fintp.38.3.2   |   E-mail this article   |   Download to citation manager
 September, 2014
III / 2014
EBSCO Publishing
ISSN 1846-887X
e-ISSN 1845-9757
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