Brain drain: The impact on taxation and measures to combat the brain drain

Abstract

During the debt crisis the number of highly specialized Greek scientists who had migrated abroad surpassed 250,000. The reasons that led to this result include the mismatch of supply and demand for skilled human capital in Greece, the high rates of unemployment, as well as underemployment, and the increased in the tax burden and social security contributions. In order to tackle brain drain, a number of measures have been announced, focusing on reducing the individual income and corporate tax, lowering VAT rates and streamlining tax incentives for investors. Tax-related measures must take into account the new environment that has been shaped after the implementation of the OECD Base Erosion and Profit Shifting project. In addition to that, they also must respect the fundamental freedoms and general principles of European Union law in general.