Additional Tax Burden Research Articles

Налоговая амнистия как инструмент борьбы с дроблением бизнеса

The author considers the tool proposed by the legislator in July 2024 to prevent tax and criminal offences, which allows businesses to voluntarily abandon the use of an illegal ‘split’ scheme in exchange for the further conduct of activities by a group of persons without the risk of their further prosecution for tax and criminal liability. The author considers the existing judicial and administrative approaches that determine the subject of proof when imputing the use of illegal ‘split’ scheme to taxpayers, as well as analyses certain features reflected in the legally enshrined term ‘business split’. The main conclusion of the study shows that there is still no certainty of legal regulation in the issue of qualification of relationships within a group of persons as aimed at unlawful ‘splitting of business’. To a lesser extent, the level of fiscal effect possible to achieve through the application of the instrument introduced by the new law is questioned. To a greater extent, in the author’s opinion, the level of certainty in the relationship between the state and business will suffer, in which the latter, as a weak party to tax legal relations, will prefer to refuse the legitimate use of tax preferences, despite the resulting additional tax burden.

Implications of the Implementation of a Carbon Tax on Investment and Economic Growth in Indonesia

Law Number 21 of 2021 concerning Harmonization of Tax Regulations is a form of renewal of various tax policies which has added a new tax object, namely carbon tax. However, the implementation of this regulation raises several problems, such as the increase in electricity prices that rely on Steam Powered Power Plants (PLTU), which can have an impact on companies' investment interest. Apart from that, the implementation of the carbon tax itself does not yet have a clear legal umbrella regarding setting emission limits, the percentage of emissions that can be traded and subject to carbon tax, and regulations related to the object and subject of the tax. The research analysis used is qualitative analysis, namely collecting data from various types of literature from which conclusions will then be obtained and become research results. The approach used is an empirical approach, namely looking at how the law operates in a society. Legal uncertainty surrounding carbon taxes and frequent policy changes can discourage investment. If companies feel uncertain about the future of carbon tax policy, this may influence investment decisions. So the Government needs to mitigate this, for example by considering compensation or incentive programs. Companies that invest in green technologies may be given tax incentives or financial assistance to mitigate the additional tax burden that may arise from a carbon tax

Summaries of Articles

Summaries of Articles

NON-TARIFF REGULATION MEASURES IN CUSTOMS LAW

Necessary to point out that the current system of tariff regulation is a prerequisite for the implementation of an effective customs policy and the implementation by customs authorities of the tasks of ensuring the economic security of the country. However, most countries don’t currently have the ability to actively respond to changes in the terms of trade by reducing or increasing tariff rates. Therefore, against the backdrop of a decrease in the customs and tariff protection of national markets, the role of non-tariff means of foreign trade policy is growing. It is non-tariff measures that are the main tool for protecting the domestic market and the country’s economy from unfair actions of foreign states in the field of foreign trade. The preference given to non-tariff measures is due to the fact that, unlike tariff measures, they do not constitute an additional tax burden for the population.
 Purpose. The article is devoted to the characterization of legal regulation of non-tariff regulation measures. The authors give classification to these measures and pay attention to their individual types: for example, product quotas.
 Methodology. he basis of the study is the dialectical-materialistic method of knowing objective reality and the general scientific and private scientific methods based on it (comparison, analysis, deduction, induction, formal-logical, comparative-legal, formal-legal, system-structural, interpretation method).
 The results of the study consist in the analysis of the term «non-tariff regulation measures», the formulation of their typology, the grounds for their application. The authors formulate a proposal for their codification at the supranational level.
 Practical implications. The results of the study can be applied in the field of customs regulation or foreign trade.

СУДОВА ПРАКТИКА ЩОДО ПРИЙНЯТТЯ ОРГАНАМИ ДЕРЖАВНОЇ ПОДАТКОВОЇ СЛУЖБИ УКРАЇНИ РІШЕННЯ ПРО ВІДПОВІДНІСТЬ ПЛАТНИКА ПОДАТКУ НА ДОДАНУ ВАРТІСТЬ КРИТЕРІЯМ РИЗИКОВОСТІ ПЛАТНИКА

The article is devoted to the analysis of judicial practice on the recognition by the State Tax Service bodies of Ukraine (hereinafter - the State Tax Service of Ukraine) of the competence of the value added taxpayers to the risk criteria of taxpayers. This article analyzes the grounds for making decisions on compliance of value added taxpayers with the taxpayer’s risk criterion, analyzes such taxpayer risk criteria, provides analysis of decisions of the Supreme Court of Ukraine and lower courts concerning disputes on recognition of taxpayers’ compliance with risk criteria, the validity and legality of the legal position of the State Tax Service of Ukraine and the legality of such actions by regulatory authorities in terms of electronic document management and compliance with their defined procedure. The problematic issues that have arisen in the tax sphere in electronic document management are identified and solutions are proposed. It is determined that one of the problematic areas of value added tax administration is the adoption of decisions by regulatory authorities on compliance of taxpayers with risk criteria. The terminology is analyzed and it is determined that the value added tax (hereinafter - VAT) is an indirect tax, which is determined and levied in accordance with the provisions of the current Tax Code of Ukraine (hereinafter - the Tax Code of Ukraine). Therefore, VAT is a national indirect, ie one that is a component of prices for goods, works and services supplied and provided, and includes tax liabilities for goods and services supplied, tax credit for such goods (services) and obligations the payment of tax to the state budget. It is analyzed that the taxpayer is obliged to draw up a tax invoice and register in the Unified Register of Tax Invoices, have the necessary economic and industrial capabilities, staff, etc., to carry out business operations for the supply of goods, works or services declared activity. In addition, the laws of Ukraine establish clear grounds for suspending the registration of tax invoices, including compliance of the taxpayer with the risk criterion. Thus, the legislator has defined a clear list of conditions under which at least one of which, namely but not limited to registration on invalid documents, lack of open bank accounts, failure to report VAT and the availability of regulatory authorities information about the risk of business transactions. Such inclusion of the payer in the list of risk puts the company in a critical position and virtually terminates the activities of the payer and its counterparties in the tax chain, as all tax credit received from such a company is blocked, which creates additional tax burden on business.

УГЛЕРОДНЫЙ НАЛОГ НА ЖИВОТНОВОДСТВО И ПРОДОВОЛЬСТВЕННАЯ БЕЗОПАСНОСТЬ

This article examines the risks associated with the introduction of a carbon tax on domestic agricultural products. The professional community is increasingly raising issues of regulating the generation of greenhouse gases in various sectors of the national economy through the introduction of the so-called carbon tax, which implies the collection of additional fees in proportion to the amount of greenhouse gases produced per unit of production. If this measure of state regulation is applied, a change in the cost of meat due to an additional tax burden will lead to a significant decrease in its consumption.

Efekty fiskalne wprowadzenia podatku bankowego w Polsce

The article attempts to assess the fiscal effects of the introduction of a bank tax in Poland. From January 2016, a new public tax in Poland has been imposed on some financial institutions, including banks. Similar solutions are also found in some European Union countries. The aim of the article was to implement literature research and legal acts as well as empirical simulation. To accomplish the purpose of the article, literature research and legal acts, as well as empirical simulation were used. The simulation showed that the introduction of a bank tax gives beneficial fiscal effects for the state in the form of additional budget revenues. The construction of the bank tax provided for in Polish law was much more beneficial for the state than the adoption of a solution operating in another EU country. On the other hand, the introduction of a new tax is a rather unfavorable situation for the banking sector, because banks hitherto covered by income taxes and VAT have to bear an additional tax burden from 2016. For the banks themselves, the adoption of a solution found in one of the EU countries would be more favorable than the Polish solution.

Depreciation as a source of investment resources of an agricultural enterprise

Purpose. The aim of the article is generalization of scientists' approaches to the recognition of depreciation as a source of investment resources of agricultural enterprises and development of practical recommendations on the use of depreciation as a component of their own financial resources in order to recreate the material and technical base of farms in the corporate sector of the agrarian economy. Methodology of research. The following general scientific methods are applied in the course of the study: analysis and synthesis of generalized opinions of scientists on the treatment of categories of “depreciation” and “amortization”, concretization and abstraction – in the development of measures to create a unit depreciation and investment fund, systematic and complex approaches to obtaining evidence the roles and locations of depreciation, as sources of investment resources of agricultural enterprises, as well as abstract and logical methods of research – in determining the economic feasibility of indexing fixed assets. Findings. It has been proved that the formation of depreciation charges by agricultural enterprises is an important instrument for stimulating investment activity. It is proposed to exempt from the income tax part of the taxable profit that participates in the formation of the investment financing fund, in the form of indexation of accumulated depreciation, taking into account the level of inflation. It is established that depreciation can be considered in the market economy as a source of financing of capital investments on the basis of its financial component – real funds in the proceeds from the sale of goods (products, works, services), which should be accumulated for the purposeful use. Originality. The feasibility of introducing a production method of depreciation for 4-5 groups of fixed assets in crop production in the formation of costs to determine profit before tax. In order to increase the role of depreciation as a source of updating and modernization of agricultural capital, it is advisable to: develop a new tax strategy, in particular, preferential taxation, introduce an additional tax burden when using depreciation not for the intended purpose; to pursue an active policy of accelerated depreciation and to introduce methods of state control over the targeted use of depreciation; to use the instruments of state support of accumulation of depreciation in the form of real money in deposit or special accounts with banks; to create regional unitary amortization and investment funds with state participation. Practical value. The proposed method of formation of the fund will allow enterprises to store depreciation resources that are directed to reproduction of fixed capital in their indexed value terms that is, taking into account inflation, which will facilitate the conduct of extended reproduction of production by modernization of the technical base. Obviously, such an approach to the formation of a depreciation accumulation fund is possible only with the break-even operation of agricultural enterprises. In the case of an unprofitable operation of the enterprise, depreciation deductions are directed to cover the losses and have no purpose. This means that depreciation for the recovery of property, plant and equipment is absent, which leads to the conclusion about the crisis. Key words: depreciation; investment; agricultural enterprise; reproduction; fixed assets.

The Imperfections of Financial Education for an Adequate Comprehension of the National Fiscal Policy

Educating on the revenue enhancement system in state-supported finance is likely an essential issue for the country’s development. This content changes public sector and the sustainability of citizens’ lives; therefore, a significant focus on the broad improvement of finance studies is essential. Furthermore, the activity could be organized in connection with the applicable higher education programs. On the other hand, financial management education is treated differently in different countries. It is becoming increasingly important that such a discussion does not directly benefit common development of financial education in recent years. One of the possible ways to deal with personal finances in different economic conditions could be changing students’ attitude to finance knowledge at universities. Young people could be supported by financial education programs that are clearly incorporated into their undergraduate or postgraduate courses. The correct management of these programs helps to improve students and cadets learning experience and the economic wellbeing. Moreover, the learning based on public administration and public finance probably educates patriots of the country and people intolerant to non-transparent activities of public servants. Eventually, the best way to determine the country’s consolidated tax paid by natural and legal persons could be the tax burden rate. Likewise, the financial data supplied to the main European statistics authority by national statistical institutions sometimes can be slightly incorrect. Therefore, even more important issue could be an ordinary citizen living only from the income related to labour relations (or corresponding relations of income) and having an obviously higher tax burden. Another crucial task of the paper is to reveal how taxation, public debt and spending and fiscal policy are perceived by the citizens. In addition, it also tries to respond to questioning about the financial and economic importance on financial education. Furthermore, the theoretical task of the paper is to show the size of the government debt, its service and expenditure in Lithuania and Latvia during the last crisis in 2008. Therefore, it is possible to consider the increase of direct taxes burden by almost twice comparing to the formally announced country’s tax burden. However, additional tax burden includes hidden taxes related to the aggregated spending of an individuals’ income. In an average case, the tax burden for an ordinary employee could come near to two-thirds of the gross yearly income. Then, the overpaid debt services can be very sensitive given to the assumption that an ordinary worker has an approximately adequate level of financial and economic education. The perception of tax burden can encourage each citizen of the country to be responsible for all public servant activities and budget planning processes. Public revenue enhancement is often difficult due to the use of the same concept of taxes as fixed costs for public sector when a person directly receives nothing but additional payments for the majority of public sector services. Therefore, the confusion of terms is fairly constant, which once again shows the need for public finances literacy in all areas of study programs for students or cadets. An authorized Lithuania’s tax burden has comprised less than thirty percent of the country’s nominal gross domestic product in recent years. Nevertheless, political leaders and socalled experts suggest the necessity for increasing Lithuania’s accumulated tax burden. However, there may be a fundamental mistake that social insurance and compulsory health insurance contributions to the funds are not calculated into private individuals and legal entities tax burden. Fortunately, the last year’s budget considered social payments as part of tax revenues. Unfortunately, there are diminutive amount of signs in the continuity of Lithuania’s fiscal policy in the 21st century.

„Uszczelnianie systemu VAT” – próba oceny skuteczności podjętego wysiłku legislacyjnego i organizacyjnego

Artykuł koncentruje się na przebiegu działań legislacyjnych i organizacyjnych mających na celu zwiększenie wydajności fiskalnej podatku od towarów i usług, podejmowanych w szczególności po 2015 roku. Główne pytanie badawcze dotyczy realizacji celów postawionych przez inicjatorów procesu „uszczelniania podatku VAT” oraz kosztów tego procesu. Jako koszty procesu zostały wskazane koszty pozafiskalne ponoszone przez podatników, w postaci obciążeń administracyjnych. Celem opracowania jest próba odpowiedzi na pytanie badawcze poprzez przedstawienie genezy, obecnego stanu oraz próby oceny w kategorii koszt/efekt wprowadzonych zmian legislacyjnych i organizacyjnych.

Tax Burden Implication of Tax Reform

This study examines the effect of the 2007 reform pertaining to the corporate tax system on the tax burden of listed firms in Nigeria using the “t” test and canonical correlation analysis. Data were collected from the financial statements of the 86 sampled firms for the period 2003-2011 subdivided into pre-reform (2003-2006) and post reform (2008-2011) sub-periods for the purpose of comparing periods’ tax burdens. Data were also segregated along the Nigerian Stock Exchange industrial sector classifications. This study finds, on the whole, that the 2007 corporate tax reform has brought no additional tax burden on listed firms, however, sectoral analysis reveals the heterogeneity in the effect of the tax reform as firms within the agricultural and natural resources sectors witnessed increases in tax burden while firms in health and oil and gas sectors were favoured with reduced tax burden. The tax burden of other sectors is unaffected by the reform.

Formation of the organizational-managerial model of renovation of urban territories

The pace of modern urban development dictates special requirements for the structure of zoning and the designation of the territories of megacities. Formed requirements for the objects of residential and recreational areas, urban infrastructure and communications facilities. A special role in the issue of improving the comfort of the urban environment, is the process of renovation of production areas. One of the main principles of urban planning is the location of production in the outskirts of cities and settlements. However, with the development of urban areas, once located at the disposal of production, are surrounded by residential and administrative-office blocks. This “neighborhood” not only causes discomfort to residents, but also creates an excessive environmental burden on the environment. In addition, the territory of the city, and especially large megacities, have a much higher cadastral value of land, and, therefore, create an additional tax burden on production, as added value to the output. All these elements make the products uncompetitive, especially in comparison with similar products produced outside the metropolitan area. Thus, the process of output of production beyond the city limits is actually cyclical and uninterrupted. Territories that remain after the withdrawal of production facilities are subject to comprehensive analysis, taking into account the social needs of the city, and further renovation.

Explaining changes in tax burdens in Latin America: Do politics trump economics?

This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained data set of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform is higher during banking crises. During electoral periods, increasing taxes becomes highly unlikely, even if the government is facing financing problems. Interestingly, politics seem to trump economics: banking crises do not affect the probability of having a reform during electoral times. Moreover, the presence of an IMF program affects the tax instruments chosen: countries with a program increase the value-added tax, while those without raise the personal income tax. Finally, the ideology of the president does not explain who bears the additional tax burden.

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained dataset of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform is higher during banking crises. During electoral periods, increasing taxes becomes highly unlikely, even if the government is facing financing problems. Interestingly, politics seem to trump economics: banking crises do not affect the probability of having a reform during electoral times. Moreover, the presence of an IMF program affects the tax instruments chosen: countries with a program increase the value-added tax, while those without raise the personal income tax. Finally, the ideology of the president does not explain who bears the additional tax burden.

Impact of Annual Budgets in Economic Development of Nepal: An Econometric Analysis

<p>This paper deals with the impact of the annual budgets on the economic development process of Nepal. The epoch-making macro economic variables are introduced through the application of the econometric models of various kinds, such as linear, log-linear in single equation system, multiple forms and the Granger Causality test (1969) by applying the annual data for the period of 1974/75 to 2006/07 in current as well as constant term. The high average elasticity coefficient of manufactured GDP, GDP, GNP and PCI respectively indicate that development expenditure is highly significant in determining development. A nominal role of internal borrowing and internal revenue in the economy and the excessive dependence on foreign aid has led the country for heavy debt service obligations every years forcing for additional tax burden.</p><p><strong>Economic Literature,</strong> Vol. XI (1-14), June 2013</p>

'Make Whole': The Need for Gross-Ups in Employment Discrimination Cases

A primary purpose of federal anti-discrimination remedies is to place the victim in the same economic position she would have occupied had no discrimination occurred. However, a lump sum award for lost pay will be taxed in the year it is received, exposing the plaintiff to increased marginal tax rates. In order neutralize the often harsh tax consequences of lump-sum wage awards, many courts have begun “grossing-up” the plaintiff’s award, relying on the “make whole” remedial purpose of anti-discrimination statutes. However, some courts still force plaintiffs to bear this additional tax burden, even though it was caused by the defendant’s discriminatory conduct. This Article provides an overview of federal discrimination statutes and the available relief; explains the adverse tax consequences of a lump-sum award in employment cases; and reviews case law and statutes supporting gross-ups, outlining the differing jurisdictional treatments and arguing for wider adoption based on the “make whole” doctrine.

Economic Valuation of a New Meteorological Information Service: Conjoint Analysis for a Pollen Forecast System

Abstract This study aims to investigate the public’s preferences for and quantitatively measure the economic value of a pollen forecast system, a new meteorological information service, in South Korea. To directly measure the economic value of the pollen forecast system and its attributes in terms of the public’s preferences, this study used conjoint analysis and a discrete choice model. In the conjoint survey, seven factors were considered as attributes of the pollen forecast system: the forecast area, forecast interval, information type, forecast period, delivery media, forecast accuracy, and price. Based on survey data from the six largest metropolitan areas in South Korea, the authors estimated people’s utility function by a rank-ordered logit model and calculated the relative importance (RI) and marginal willingness to pay (MWTP) for each attribute. People considered price, meaning the additional tax burden, to be the most important attribute, with a relative importance of 42.3%. In descending order of relative importance, price was followed by forecast accuracy, forecast interval, forecast area, forecast period, and information type; these attributes had MWTP values of 0.133, −0.017, 0.098, 0.059, and 0.011 USD month−1, respectively. The results of this study can serve as guidance of government investments in the pollen forecast system and provide an empirical basis for the application of conjoint analysis to economic valuation studies on a wider range of meteorological information services.

The refusal of the subsistence level for nonresident taxpayers: an analytical survey of the relevant legal framework

According to the case law of the European Court of Justice, personal circumstances of nonresident taxpayers from other member states of the European Union do not need to be taken into account by the state of source when determining the taxable income of such nonresidents. Thus, the refusal of a subsistence level to nonresidents is in general in line with the European law. However, according to the relevant rulings of the court no additional tax burdens may caused by using higher tax rates for nonresidents. In this paper it is therefore examined in what ways the subsistence level may be refused to nonresidents. In order to do so, it is crucial to examine how the subsistence level is granted to resident taxpayers. Especially if the subsistence level is entirely integrated into the tax scale, this might lead to incorrect results. In order to avoid such incorrect results, each limit of the tax scale has to be analyzed more precisely. As this paper shows, there is even a contradiction in the rulings of the European Court of Justice. Additionally, this paper shows that an incorrect refusal of the subsistence level leads to a modification of the applicable tax rates for nonresidents. As a result, nonresidents are faced with an additional tax burden on top of the additional tax burden caused by the refusal of the subsistence level itself. These implications are shown for the case of Germany. They might be in breach with former rulings of the court.

Earnings Management, Restatement and Additional Tax Burden Effect

Earnings Management, Restatement and Additional Tax Burden Effect

VAT grouping: the relevance of the territorial restriction of Article 11 of the VAT Directive

Contrary to the Commission's view, the participation of a head office in a VAT group does not disassociate its foreign fixed establishment from the head office in order to create two distinct taxable persons, the VAT group with the head office as a member on the one hand and the fixed establishment on the other. Consequently, transfers of goods or services between a head office participating in a VAT grouping in its state of establishment and its foreign fixed establishments remain events within one taxable person. The territorial restriction of VAT groupings to companies established in the same Member State does not generally establish a difference in treatment of cross-border and purely internal situations. As regards the supply of goods between companies being closely bound to one another by economic, financial and organisational links, the exclusion of a cross-border grouping does not in principle create an additional tax burden compared to a cross-border situation, since cross-border transfers of goo...