The Impact of Tax Avoidance in Romania: Corporate Profit Shifting to Tax Havens

Laurentiu-Mihai Tanase () and Norina Popovici ()
Additional contact information
Laurentiu-Mihai Tanase: Bucharest University of Economic Studies, Romania
Norina Popovici: “Ovidius” University of Constanta, Faculty of Economic Sciences, Romania

Ovidius University Annals, Economic Sciences Series, 2024, vol. XXIV, issue 1, 134-139

Abstract: This study investigates the impact of tax avoidance on Romania's economy, specifically its relationship with GDP, comparing Romania's situation to other EU member states. The research utilizes a quantitative methodology, analyzing data from 2015 to 2020 through statistical methods, including regression analysis. The findings indicate a substantial increase in profits transferred from Romania to tax havens, rising from 4 billion USD in 2015 to 7 billion USD in 2020, with a peak of 8 billion USD in 2019. The share of profits lost as a percentage of GDP ranged from 2.25% to 3.19%, with an average of 2.63%. Transfers to non-EU tax havens increased significantly, while those to EU tax havens remained constant. Regression analysis shows a positive and significant relationship between GDP growth and profits lost, with an increase of 0.039904 units of profits lost for each additional unit of GDP. These results highlight the economic impact of tax avoidance and underline the need for effective policy measures to address this issue.

Keywords: tax avoidance; profit shifting; tax havens; Romania (search for similar items in EconPapers)
JEL-codes: F23 H26 H32 (search for similar items in EconPapers)
Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://stec.univ-ovidius.ro/html/anale/RO/2024i1/Section%201%20and%202/17.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xxiv:y:2024:i:1:p:134-139

Access Statistics for this article

Ovidius University Annals, Economic Sciences Series is currently edited by Spatariu Cerasela

More articles in Ovidius University Annals, Economic Sciences Series from Ovidius University of Constantza, Faculty of Economic Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Gheorghiu Gabriela ().