TAX COMPETITION AND THE RELOCATION PROCESS

In this article the author discusses the problem relating to the tax competition in the context of relocation as a process resulting from the ongoing globalization of economic activity. For this purpose the author discusses the essence and causes of tax competition and relocation. The conclusion is that relocation leads usually to an increase in the competitiveness of enterprises, their development, and thus to the development of the economies of individual countries. Healthy competition leads to streamlining the fiscal policies of competing countries and to the creation of a business-friendly atmosphere. Therefore, the role of governments, particularly in the developing countries, is such action, including the use of fiscal instruments, that would enable the achievement of competitive advantage in the international market and socio-economic development.