The Economic Security of Business Transactions Management in business Edited by Konrad Raczkowski and Friedrich Schneider Chartridge Books Oxford Hexagon House Avenue 4 Station Lane Witney Oxford OX28 4BN, UK Tel: +44(0) 1865 598888 Email: [email protected] www.chartridgebooksoxford.com First published in 2013 by Chartridge Books Oxford ISBN print: 978-1-909287-68-6 ISBN digital (pdf): 978-1-909287-69-3 ISBN digital book (epub): 978-1-909287-70-9 ISBN digital book (mobi): 978-1-909287-71-6 © The editors and the contributors, 2013 The right of The editors and the contributors to be identifi ed as author of this Work has been asserted by him/her in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. British Library Cataloguing-in-Publication Data: a catalogue record for this book is available from the British Library. All rights reserved. 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Produced by electronic copy supplied by the editors and the contributors Printed in the UK and USA Publication of this book was financially supported by the Economic Chamber of Non-Ferrous M etal and R ecycling , Polish Security Printing Works and Polish Bank Association CONTENTS PART I. SHADOW ECONOMY AND TAX EVASION 1 CHAPTER 1 Size and development of the shadow economy and of tax evasion within Poland and of its neighbouring countries from 2003 to 2013: some new facts (Friedrich Schneider and Konrad Raczkowski) 3 CHAPTER 2 How to curtail Poland’s shadow economy: the viewpoints of business and tax authorities (Bogdan Mróz and Mariusz SokoGek) 32 CHAPTER 3 Shadow banking versus the shadow economy in Poland (Jan K. Solarz) 55 CHAPTER 4 Why VAT carousel crime schemes are almost impossible to prosecute in Poland? (Czesaw Jdrzejek, Jacek Wickowski, Maciej Nowak and JarosGaw Bk) 68 I Contents CHAPTER 5 The latest changes in the French tax evasion policy and its influence on economic and financial security (Urszula Zawadzka-Pk) 89 PART II. ECONOMY AND BUSINESS TRANSACTIONS 101 CHAPTER 6 The idea of homo oeconomicus and the role of culture in the economy (Marian Noga) 103 CHAPTER 7 The implications of tax competition and “race to the bottom” for economic growth (Jolanta SzoGno-Koguc and Magorzata Twarowska) 112 CHAPTER 8 Correct planning of budget revenue as an essential condition for secure business transactions (Eugeniusz Rukowski) 124 CHAPTER 9 The effects of public transfers on an economic system (Marta Postua) 135 CHAPTER 10 The role of marketing information in the assessment of a contractor’s credibility in business negotiations (Bogdan Gregor and Magdalena Kaliska-Kula) 154 CHAPTER 11 Implementation of the business counterintelligence branch in enterprise structure (Miroslaw Kwieciski and Krzysztof Passella) 169 CHAPTER 12 Systematization of risk in internal and international markets (Katarzyna ukrowska) 191 II Contents CHAPTER 13 The role of the supreme audit office in tackling corruption and other types of organisational pathologies (Zbysaw Dobrowolski) 219 CHAPTER 14 Analysis of state bank guarantees offered to enterprises by national bank holdings and system solutions in selected countries (Dorota Ostrowska) 244 CHAPTER 15 Common banking supervision within the financial safety net (Beata Domaska-Szaruga) 259 CHAPTER 16 Crisis management in the global economy (Robert Dygas) 275 PART III. MANAGEMENT AND ECONOMIC SECURITY 289 CHAPTER 17 Business Process Management as a way to achieve national economic security (Piotr Senkus) 291 CHAPTER 18 Collaborative networks as a basis for internal economic security in sustainable local governance. The case of Poland (Barbara Ko?uch and Katarzyna Sienkiewicz-Mayjurek) 313 CHAPTER 19 Changes in European foreign trade in the context of economic security (Agnieszka GGodowska) 329 CHAPTER 20 The impact of non-military threats to economic security (Andrzej Limaski, Zbigniew Grzywna and Ireneusz Drabik) 349 III Contents CHAPTER 21 The right to deduct input VAT from a dummy invoice vs. economic security of the EU Member States (Jerzy Duy) 369 CHAPTER 22 Role of the Polish construction industry in the protection of the nation’s economic security (Adrianna Trzaskowska-Dmoch and Magdalena Hryniewicka) 386 CHAPTER 23 Security of electronic transactions in business trading in Poland (Sylwia Wojciechowska-Filipek) 406 CHAPTER 24 Risk factors in the management of real estate enterprises (Piotr Tomski) 427 IV INTRODUCTION “Every year around one trillion euro’s is lost in EU Member States because of tax evasion and tax avoidance. (…). Tax eva- sion is unfair to citizens who work hard and pay their share of taxes for a society to work. It is unfair to companies that pay their taxes but find it hard to compete because others don't. Finally tax evasion is a serious problem for countries that need resources to restore sound public finances.” Herman van Rompuy European Council, May 22, 2013 Providing you with this book, we are aware that it merely opens a dis- cussion on the security of the contemporary business transactions. To what extent is the international economic order of the past thirty years, determined e.g. in the United Nations Convention on Contracts for the International Sale of Goods, a fiction of equality and mutual benefits, which is separated from the risk of the business transactions in the 21st century, and to what extent does it refer to actual mutual obligations and respect of the belief and trust in international trade? To what ex- tent has the process of establishing and developing individual multina- tional corporations introduced asymmetry in the accumulation of capi- tal and its use for subjective purposes? How strong can the temptation and actions aimed at treating tax law subjectively, through commercial V Introduction and collective tax evasion be? And finally, how can the countries – which are national by name rather than actually, ensure their own economic security, protecting their own budgets against drainage and counteracting an uncontrolled increase in public debt? These are only some of the questions which should be posed when talking in general about managing a country, and especially a business. We are convinced that the economic security of business transac- tions should be discussed systematically, within the scope of two dis- tinguished, yet merging categories: economic, including the exchange of goods and services determined by supply and demand, and legal, determined by economic law within the scope of civil law. A kind of a superordinate category in this system should be a management system which enables entrepreneurs, contractors, or final consumers to make managerial decisions. Only such a situation, considered from an indi- vidual’s, entrepreneur’s or state’s point of view, enables minimizing risk through carrying out an analysis and presenting a forecast for the security of the business transactions. However it is important to re- member that there is often an information gap, and if this happens too often, in the long term it always leads to making irrational decisions, which threatens the economic security of the business transactions of a given entity.