GLOBALIZATION AND TAX COMPETITION

In the past, it was not easy and sometimes not possible to move the company's headquarters to another country, so there was only tax optimization in the field of tax costs that reduced tax rates to a minimum. In doing so, she used all law-enabled or law-abiding practices. The process of globalization has caused considerable, almost uncontrolled capital movements. The size of the tax burden today is a significant factor in investor decision-making about the allocation of its investments. Companies can move their tax bases to countries with a more favorable tax policy. National efforts to attract as much investment as possible to their country have ultimately led to tax competition. National governments are faced with the choice of responding to tax competition. Either by reducing their taxes to tax competition, they can either engage or, on the contrary, try to limit it through harmonization processes. High capital mobility creates headache countries who afraid of potential race to the bottom in corporate taxes. The main objective of the article is to identify the risks and benefits of tax competition, to analysis on the existence of corporate tax competition across the European Union member states.