– Tax evasion and tax compliance have been popular research subjects for several decades. This paper aims to present a comprehensive review of the literature explaining individual taxpayer's behaviour.
– Recognizing Allingham and Sandmo's model as the starting point, important modern behavioural approaches in conjunction with the social disciplines are reviewed.
– Synthesis of findings suggests a wide array of factors influencing the tax evasion – tax compliance decision. So far, the most comprehensive explanation incorporating the attributive factors along with their interactions belongs to Kirchler et al.'s “slippery slope framework”.
– Tax compliance's importance in public finance increases dramatically within the current sovereign debt crisis in the global economic environment. In light of the developments in the front of behavioural economics, further research is needed to validate all hypotheses.
– The contribution of the present paper lies on the review and categorization of alternative approaches in economic theory, including recent developments and applications within the general scope of behavioral economics.
