Economic Crisis and the Movement of the Value Added Tax Rates in the European Union Member States

Tools of the fiscal policy are also used for the mitigation of the economic crisis effects. The most obvious changes can be observed in the oscillation of value added tax rates. The current legislation only specifies the minimum rates of the reduced and standard tax rate, which gives the possibility to Member States to change the rates, respectively to increase them. This paper compares the macroeconomic parameters which characterize the economic crisis and changes in VAT rates in 27 European Union Member States in the period of 2008 - 2013. The aim is to examine the dependence between the growth rate of the gross domestic product and public deficits on one hand and the change of VAT rates on the other hand with the use of analytical and statistical methods (static and dynamic model). The tested assumption is the increase of tax rates as an effort to reduce public budget deficits due to the economic crisis.