Industry characteristics of property tax calculation in oil and gas sphere and impact on enterprise competitiveness (in the order of discussion)

Abstract

As it is known, according to the tax legislation, the property tax is calculated from the average annual residual value of fixed assets of the enterprises. However, since in enterprises, particularly in the oil and gas industry, in addition to commercial activity, non-commercial activity is also the property of the enterprise in related areas, the property tax calculated for those properties plays a role in the financial and economic activity of the enterprise as well. At the same time, the calculation of property tax on depreciable and non-depreciable assets (property) (if those assets are classified as fixed assets and are shown as fixed assets in the balance sheet of the enterprise and in Appendix No. 1 of the profit tax declaration) is also related to the loopholes in the tax legislation, leads to the additional problems. On the other hand, the property tax calculated for the preserved oil wells in the oil and gas industry, as well as the unused (discontinued) processing facilities in the oil refineries and, conversely, the property tax calculated for the new facilities and equipment purchased or installed as a result of the modernization, technological innovations, as it is important how the property tax calculated for the property used in other non-oil product producing and service enterprises of the oil industry affects the competitiveness of the enterprise, the paper reviews the role of calculated or to be calculated property tax in the current and future financial-industrial activity, and the directions of its impact as well.