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VAT Gap Estimation-Czech Republic Case Study The paper deals with the estimation of the Value Added Tax Gap in the Czech Republic during the years 2009-2014. In the introduction, the term of Value Added Tax Gap and related terms are defined following available approaches and different methods of the Value Added Tax Gap estimation are presented. In the analytical part of the paper, the Czech Value Added Tax Gap is measured using three applicable methods-the decomposition of the gap on the VAT, the identification of transactions subject to VAT and the adjustment of GDP. In this part the exact procedure for possible replication of the research is declared and the comparsion of the results reached for the Czech Republic using different methods of Value Added Tax Gap estimation is carried out.

This research aims to propose a model adding to the competitiveness of companies by identifying factors that determine the profitability of the selected companies (both publicly traded and unquoted private companies of all sizes). Another aim is to prove a dichotomy between the motivation of equity holders and senior lenders as far as acceptable financial leverage is concerned. The paper is innovative based on its combination of several different factors influencing corporate profitability (i.e. firm-specific effects: current ratio, labor cost ratio, working capital financing ratio, long-term financing ratio, return on sales, age of the firm; industry-specific effects and other macroeconomic effects) and by assessing determinants concerning the interests of shareholders and other stakeholders using a panel regression analysis with fixed effects. The authors prove that the determinants of the operating performance of Czech trading companies differ substantially when the performance is measured by ROA or by ROE. This clearly shows discrepancies between the equity holder interest to maximize their returns on investment and the other stakeholder interests. Specifically, the authors have found that the leverage, both in terms of working capital and long-term financing, negatively impacts returns on assets. On the other hand, it positively impacts returns for equity holders both in the Wholesale and Retail sub-samples. Interestingly, other determinants of operating performance, such as capital intensity, labor cost ratio, historical profitability, and macroeconomic variables, are of comparable significance, impacting both the ROA and ROE analyses.

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There are many studies focusing on VAT (value added tax) tax gap but very few relevant studies that deal with the corporate income tax loss. The studies vary particularly in their methodology, databases and interpretation. In the case of the Czech Republic the studies resulted in a range between CZK 57 billion tax gap and CZK 12.5 billion corporate tax revenue gain caused by the tax planning. The main aim of the paper is to calculate the corporate income tax effi ciency rate for the Czech Republic and compare it with other member states. The indicator of corporate income tax effi ciency is important for the calculation of the tax revenue without profi t shifting (RWS) indicator and then the subsequent corporate income tax gap estimation for 2013-2015, which is the second goal of the paper. The RWS indicator gives an overview of the Czech Republic´s amount of loses/ gains relating to the corporate tax base erosion and corporate profi t shifting. In the case when the actual corporate income tax revenue takes a higher value than the revenue without profi t shifting indicator the jurisdiction benefi ts from the profi t shifting operations. The opposite situation results in tax revenue losses caused by profi t shifting to other "more attractive" tax jurisdictions. Authors' study re-estimation results in approximately CZK 9.404 billion tax gap caused by base erosion and profi t shifting instead of 12.5 billion CZK that shows EPRS's study for period 2013. The third aim of the paper is to deal with the difference between input data from Eurostat database and offi cial data from General Financial Directorate.

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