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Fiscal Competition And Direct Foreign Investments: Romania Versus Poland

Author

Listed:
  • Vuta Mariana

    (Academia de Studii Economice, Bucuresti, Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Lazar Paula

    (Academia de Studii Economice Bucuresti, Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Vuta Mihai

Abstract

The European Economic Community treaty defines indirect taxation common rules taking into consideration their impact upon free merchandiseâ€â"¢s circulation and upon international commercial exchanges. Once the Roma treaty has been signed (1957) the established scope was creating a common market. But, how is it possible to create a common market without any monetary and fiscal instruments? Thus, these instruments have had to be created in order to achieve such an objective. If from the monetary point of view introducing euro as a common currency was a big step ahead, from the fiscal point of view things havenâ€â"¢t evolved in such an easy manner. Fiscal objectives are achieved only if the national market is running normally and correctly.Indirect taxation is harmonized base upon article 113 from the European Union Treaty, while regarding direct taxation legal recommendations and regulations approval we canâ€â"¢t talk about harmonization but about fiscal competition. We are stating this because there are 27 states in the European Union and each one is sustaining its own direct taxation system. Furthermore, the taxation system (fiscal system) is influencing member states economical performances through economies, investments and human capital formation by affecting the revenueâ€â"¢s distribution, research and development expenses level and type and by fiscal competition â€' an effect more and more profound. In this context we aim at analyzing the way fiscal competition had had a positive impact upon attracting foreign direct investments in Romania and Poland. We also aim at underlining positive and negative points for fiscal competition taking into consideration that not only a decrease in micro or macro-economic fiscal burden will have a positive impact upon investments in-flows and there are other factors to be taken into consideration, like: infrastructure, labor expenses, research and development expenses, internet access, etc. The research is mainly based upon a synthesis of the reached area in the special literature. The study continues a fundamental research using deductive and inductive research mechanism in order to delimit the used concepts.

Suggested Citation

  • Vuta Mariana & Lazar Paula & Vuta Mihai, 2012. "Fiscal Competition And Direct Foreign Investments: Romania Versus Poland," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 527-532, December.
  • Handle: RePEc:ora:journl:v:1:y:2012:i:2:p:527-532
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    References listed on IDEAS

    as
    1. Guntram Wolff, 2007. "Foreign Direct Investment in the Enlarged EU: Do Taxes Matter and to What Extent?," Open Economies Review, Springer, vol. 18(3), pages 327-346, July.
    2. George R. Zodrow & Peter Mieszkowski, 2019. "Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 17, pages 525-542, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    fiscal competition; foreign direct investments; fiscal systems; tax rate;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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