Abstract:

In this article we investigate the relationship between tax evasion and migration, if there is a connection between the two and the intensity of such correlation. The research is focused on cross-country data for the years 2011 - 2016 from the EU Member States and it uses statistical tools in order to reach and interpret the results. The main finding is that in order to determine whether the migration stock has an impact on tax evasion or not, another proxy measure for tax evasion should be used, other than the VAT gap. This study has shown that there is no correlation between the two sets of analyzed data, mainly because the fiscal impact of migration can be noticed on the direct taxes’ collection levels (personal income tax, social security contributions) – through illegal or undeclared work performed by the immigrants, and less on indirect taxes (value added tax). The latter are indeed influenced by migration through consumption habits of the migrant population, but such influence cannot be measured by use of the VAT gap.