Trends in the development of tax systems in OECD countries

This master thesis is dedicated to the research of development of tax systems in OECD countries. The main objective of the thesis is to analyse these tax systems and determine whether convergence occurs among them. The validity of the hypothesis assuming convergence of tax systems is tested using the sigma convergence method and cluster analysis method. Many papers dealing with convergence in the EU exist, but only a small number of papers examine convergence in the OECD. The intention of this thesis is to fill this gap. The first part of the thesis places the evolution of tax policy in a historical context and focuses on the process of tax systems shaping into their current modern form. Furthermore, the thesis discusses the impact of globalization and the liberalization of international trade on the development of tax competition, which is used by multinational enterprises for aggressive tax planning. As a result, states are resorting to international cooperation to prevent tax base erosion and tax avoidance. This cooperation in the form of OECD’s coordination and EU’s harmonization activities is the focus of the second part of the thesis. The third section deals with a comparison of the tax systems of OECD countries using indicators that characterize the tax system. Subsequently, the fourth section is dedicated to the convergence analysis itself. Although the results of sigma convergence show a reduction of differences in the individual indicators that characterize the tax system, the cluster analysis does not support the hypothesis of convergence of tax systems.