Differences In Tax Treatment Research Articles

Notes on Tax Disputes from Misapplication of Indonesia-Japan Tax Treaty: A Study Based on Indonesian Tax Court Decisions

This study aims to examine the legal, economic, and political aspects of Indonesia-Japan tax treaty. Next, it examines tax disputes brought to the Indonesian tax court due to the misapplication of Indonesia-Japan tax treaty. It digests the Indonesia tax court decisions stipulated during Fiscal Year 2015–2021. The Indonesia-Japan tax treaty has existed for more than 30 years to allocate the taxing rights of the two countries. Japanese business has invested in Indonesia through the establishment of subsidiaries. The disputes occurred due to, in the first case, the interpretation regarding whether a business entity or an individual is a party that can be categorized as a tax subject in accordance with the Indonesian and Japanese tax treaties. Second, is the issue of the definition, classification, and characteristics of income that result in differences in tax treatment. Third, we find that the tax rates used for income withheld or collected because of income classification. Finally, the disputes also occurred due to the fulfilment of administrative issues which has been taken most proportion of the disputes. Therefore, both parties in a dispute need to have a similar understanding on how the agreed tax treaty applies to the dynamic of business. tax treaty, tax dispute, international tax law

Renewable energy taxes and environmental impacts: A critical reflection from the wind tax in Spain

In recent decades, wind energy has undergone significant progress, with the contribution of countries such as China, the United States, Germany and Spain standing out, although there is no single comprehensive model for promoting renewable energy worldwide. In Spain, the regions of Galicia, Castilla-La Mancha and Andalusia have led this process, with significant changes in their contribution depending on the economic situation and the varied legislative framework in force at any given time. Although wind energy is less harmful to the environment, it is not harmless, and environmental impact and its penalisation is one of the key elements in the applicable regulations. In the case of Spain, the three regions mentioned above, out of a total of seventeen, apply their own taxes to tax the environmental impact of wind energy. The aim of this paper is to describe and compare the wind tax applied in the aforementioned regions from 1995 to 2020; to characterise wind taxation socio-economically, and to assess the suitability of this type of taxation to tax the environmental impacts associated with wind energy activity in Spain. The differences in tax treatment are notable and it is observed that the concept of environmental impact has been anchored in the past and, today, older wind farms with less powerful wind turbines are those that bear a greater tax burden, while more modern, more powerful and larger wind farms (with a significant environmental, acoustic and visual impact) may even be exempt from taxation.

ANALYSIS ON THE IMPOSITION OF ONLINE REKLAME TAX ACCORDING TO LAW NUMBER 28 OF 2009

This research about the imposition of online billboard tax as reviewed from article 49 of law number 28 of 2009 concerning regional taxes and regional retribution. The research discusses tax imposition arrangements tax-based advertisements online on the Internet and social media as well as the legal implications of not being regulated as the basis for tax-based advertisements online the internet and social media. Because there are differences in tax treatment between the implementation of conventional advertisements with the based advertisements online. Conventional advertisements are taxed in accordance with the Regional Tax and Retribution Law. However, unlike the case with the advertisement on the internet and social media. This research uses normative juridical research. The approaches that are using are statute approach and conceptual approach. By using this approach can find online advertisements tax imposition arrangements tax based advertisements online on the Internet and social media as well as the legal implications of not being regulated the basis for tax based advertisements online the internet and social media. Based on this research of results, there are several provisions such as the Law on General Provisions and Tax Procedures, Act Income Tax and also the act of Value Added tax. However, conceptually, it is still unable to reach in detail the implementation of the tax based advertisements online. So that a legal vacuum, legal uncertainty in tax imposition and the gap in the value of justice in tax imposition. Based on this, it should be the Government strengthening the Laws and Regulations relating to Taxation. Then, collaborate with other government agencies in the field of communication and information technology. There is a need for a special provision that can accommodate the imposition of this online-based advertisement tax which is carried out through social media and the internet.

A PROPOSED FRAMEWORK TO ADDRES ACCOUNTING AND TAX PROBLEMS OF COSTS RESULTING FROM ENVIRONMENTAL EMISSIONS

This study aimed to develop a proposed framework to treat accounting and tax problems of costs resulting from environmental emissions and to determine the difference between the accounting treatment of the tax treatment of costs resulting from environmental emissions and its impact on the gap between accounting profit and tax profit. In order to achieve this goal, the researcher relied on theoretical rooting through the inductive method of books, references, and Arab and foreign studies, and then conducting a field study by designing a survey list of tax examiners in the tax authority, employees of financial departments and cost departments in Egyptian organizations and establishments, In the field of study to benefit from the academic and theoretical experience in the subject of the study. The sample included 92 members of the study community who showed a willingness to participate in answering the questionnaire. The study concluded that there is a significant correlation between the accounting problems treatment faced by management and the accurate measurement of costs resulting from environmental emissions and there is a significant correlation between the difference in tax treatment of the costs resulting from environmental emissions and the gap between the accounting profit and the tax profit. The study recommended following the Techniques in the survey list to treat the problems of accounting measurement for the costs resulting from environmental emissions, as well as the tax and accounting treatment of these costs, which proved to be effective and important from the point of view of the research sample.

Valuing S Corporations: An Extension of the S Corporation Economic Adjustment Model

Following a series of US Tax Court decisions during the late 1990s and early 2000s, appraisers revisited how to value privately held S corporations. In particular, the key issue concerned how to account for the differing tax burdens between C corporations and S corporations when financial data from the former are used to appraise minority interests in the latter. One method developed to address this issue is the Van Vleet model—also known as the S Corporation Economic Adjustment Model (“SEAM”)—which considers the differences in tax treatment between S corporations and C corporations, and their respective shareholders. The model produces the S Corporation equity adjustment multiple, which can be applied to the S corporation equity value when such value has been estimated using C corporation data. One of the primary assumptions of the model is that the S corporation organizational form of the subject company will continue in perpetuity. In practice, however, there may be instances when the appraiser is not ...

PENERAPAN PERATURAN PEMERINTAH NOMOR 46 TAHUN 2013 DIBANDINGKAN PELAKSANAAN PAJAK PENGHASILAN PADA PT GLOBAL BINTANG UTAMA JAKARTA

This study was conducted to determine how much influence the implementation of the before and after implementation of Government Regulation No. 46 Year 2013 on PT Global Bintang Utama Jakarta. In mid-2013 the Government issued Government Regulation No. 46 Year 2013 is localized for enterprises that have a gross income below Rp.4.800.000.000 (four billion, eight hundred million rupiah). Government Regulation No. 46 Year 2013 issued not to replace Law No. 36 In 2008, these regulations are specialized for small and medium enterprises (SMEs). In Act No. 36 of 2008 by Government Regulation No. 46 Year 2013 there is a difference for the count, deposit and reporting of tax payable on an enterprise and differences in tax treatment, these rules in terms of taxation policy, the tax laws and tax administration in accordance with applicable tax regulations.

Tax Aspects of Mergers and Cross-Border Mergers

The paper concentrates on tax aspects of merger with a special attention to cross-border ones. Despite the fact that Directive, which set the conditions for mergers, business investment and exchange rate of shares, was issued 24 years ago, unified treatment of tax aspects hasn't been reached yet. This paper is based on research of tax rules transposed from Tax Merger Directive, 83 into law systems of EU member states. This Directive was used for tax treatment of domestic mergers as for cross-border ones. Although the Directive has been transposed, there are differences in tax treatment among member states. The paper shows inability of solving the problem by Directive as coordination of the tax and legal regime of several jurisdictions are usually not adapted to each other and examples when the European Court of Justice is asked for treatment. Different approaches to discussed issues are presented in the paper.

THE DIFFERENCES IN TAX TREATMENT OF SMALL AND MEDIUM ENTERPRISES IN EUROPEAN UNION MEMBER STATES AND CROATIA

The importance of SMEs in the overall economic development as well as the tendency of Croatian accession to the European Union provide motivation for research of differences in tax treatment of SMEs in Croatia and EU countries. When Croatia joins the EU, a significant part of the tax system must be reformed according to the joint directives that regulate the process of tax harmonization in the European Union. One of the effects of these reforms should be in increased competitiveness of Croatian SMEs in the common market. Therefore, it is important to identify in which areas of the tax system changes can improve competitive position of Croatian SMEs. The paper analyses different features of corporate income tax together with all sorts of incentives and relief from other taxes that present burden for the SMEs in European Union Member States and Croatia. Special attention is devoted to preferential tax treatments that can boost competitiveness in the country. The main thesis of the paper argues that conclusions based on comparative research of the position of SMEs in the tax system can enable creation of optimal national tax system both with the accordance with the EU regulation and goals of increased competitiveness.

Incitations perverses, résultats non durables. Le rôle des politiques salariales et fiscales dans la crise financière

Résumé La crise du crédit de 2007-2009 s’explique pour partie par les incitations perverses données par les politiques de rémunération et de taxation. Les politiques de rémunération ont été conçues pour répondre au problème principal/agent mais ont, in fine, stimulé la maximisation des bénéfices à court terme. Combiné avec une structure de return asymétrique, cela aconduit à des prises de risque qui se sont révélées néfastes pour les entreprises et leurs stakeholders. La fiscalité a promu l’endettement au travers de la déductibilité des charges d’intérêt dans le chef des entreprises et de celle des emprunts hypothécaires dans le chef des ménages. Des différences de traitement fiscal ont encouragé la substitution de stock options et de plus-values, moins taxées, à des rémunérations classiques. Un effet de cet arbitrage a été l’accentuation de la prise de risque. Classification JEL : H31, H32, J33

The Social Norm of Tipping, Its Correlation with Inequality, and Differences in Tax Treatment Across Countries

In a previous article I argued that tipping facilitates tax evasion, hurts employees’ financial security in the long run, and is a form of negative externality imposed by wealthy people on the rest of society. In this Article I try to understand the reasons for the greater popularity of the norm in the U.S. compared to other countries, suggesting it may be related to the U.S. cultural preference for linking redistribution with work requirements, relatively high income inequality and consumerism. To that end, I further develop the negative externality argument suggested in the previous article by looking at trends in income inequality in the U.S. and by interpreting the global distribution of the norm through the prism of my inequality/negative externality argument. I then look at the tax treatment of tips in various countries in search of a pattern that supports the differences in social norms.

An analysis of certain issues relating to the taxation of equity instruments

In this article we examine certain issues associated with Section 8C and other important and frequently encountered related provisions of the Income Tax Act. The issues examined relate to: the difference in tax treatment of restricted and unrestricted equity instruments; possible inequitable tax treatment where an employee receives both an interest free or low interest loan and an equity instrument from an employer and also where a taxpayer receives an equity instrument as trading stock; and the donations tax implications of the donation of a restricted equity instrument. The article does not purport to be an exhaustive analysis of these provisions; rather it discusses certain interesting issues encountered by the authors.

Tax Implications of Hedge Fund Investments

Different investment vehicles have different implications for individual, corporate, and tax-exempt investors. Hedge funds in particular pose significant tax considerations. In order to achieve the benefits of tax planning for U.S.-based investors, a thorough understanding of the major differences in tax treatment of three common hedge fund structures (U.S. master-feeder, offshore master-feeder, and side-by-side) and private foreign investment companies is necessary.

Apologia for the Double Tax of Corporation Income

One of the most controversial aspects of the U.S. income tax system is the double taxation of corporate income. Such income is taxed both when it is earned by the corporation and when it is distributed to the shareholders. Most other kinds of income are taxed only once. It is generally thought that treating corporate income less advantageously than other income distorts investment incentives and reduces economic productivity. This article draws upon the fundamental insight that a properly structured income tax encourages investment in risky assets to argue that a second layer of tax on corporate income can be a very efficient way of raising revenue and can possibly improve economic productivity. The article also shows how this insight helps to justify the difference in tax treatment between debt and equity which is generally thought indefensible. It also analyzes how the U.S. income tax could be restructured to take advantage of this phenomenon.

Many Faces of Liquidity and Asset Pricing: Evidence from the U.S. Treasury Securities Market

This paper tests the illiquidity premium hypothesis using U.S. Treasury securities intraday interdealer data. In contrast to the existing literature where notes are matched with bills in terms of maturity date, we compare notes with other notes maturing on the same day. One reason for comparing notes with notes rather than notes with bills is that differences in tax treatment across bills and notes could confront an experiment to measure the illiquidity effect. We find that notes are quoted at essentially identical prices despite substantial differences in their liquidity. This rejection of the hypothesis is in sharp contrast to the result of previous studies (Amihud and Mendelson, 1991). Therefore we reconsider the evidence based on matched bills and notes. We identify cross-sectional variation in bill-note pricing differences that cannot be supported by the illiquidity premium hypothesis. We also show that the pricing difference is smaller for matches with on-the-run bills, although the difference in liquidity between these bills and notes is significantly larger.

An historical framework for the Federal taxation of dividend and interest payments in the US

This paper presents an historical analysis of the deductibility of interest expense and the nondeductibility of dividend payments by corporations in the US over three distinct periods of tax policy. Many in government, industry and academia have debated the disparate tax treatment between interest and dividends. Given the nature of this debate, this paper seeks to identify the origins of the difference in tax treatment of corporate interest and dividend payments. This study aims to inform policy deliberations by examining events during three periods, namely the Civil War era, the implementation of the Revenue Act 1909 through to 1939, a “watershed year” in US taxation, and the period from 1939 to the present day.

A MARGINAL ANALYSIS OF THE BENEFIT-COST RELATIONSHIPS OF EXECUTIVE COMPENSATION PLANS*

CORPORATIONS typically employ a variety of devices to remunerate executive talent. The purpose of this study is to identify the reward and cost associated with each plan in the executive-compensation package and to compare pay plans in terms of their relative cost efficiency. All comparisons are made on an after-tax basis, to recognize explicitly the differences in tax treatment of the various plans and the progressive nature of personal taxes. In addition, comparisons involving differences in timing employ a discounted-cash-flow computational framework. Additional adjustments in the calculations recognize the possibility of the employee's death before receipt of deferred rewards and the uncertain nature of stock-based remuneration. The expected after-tax present value of the relevant monetary flows forms the basis for comparison on both the benefit and cost side of the transaction. The analysis is performed in two distinct phases. First, the benefit-cost relationship for each of a series of pay plans is expressed in equation form and analyzed in detail with a sensitivity analysis to identify the relative importance of parameters such as age, subjective opportunity rates, and marginal tax rates in each set of equations. A set of typical pay plans is then compared on the basis of their cost efficiency in rewarding a group of typical corporate executives. The analysis is extended to consider the possibility of allowing the executive to select his own benefit package from a set of equal-cost pay plans. In addition, the analysis considers the tax implications of executive pay by tracing the effect on federal tax revenues of an increment to the executive's reward under each pay plan. The study was conducted prior to the 1969 tax-reform legislation and hence is based on the prior tax law. The new tax treatment of many pay alternatives, while altering the absolute values of benefit and cost, changes the conclusions based on relative costs very little. The results of the analysis indicate that the lowest cost per dollar of reward in the compensation package is achieved by pay plans that provide for the deferral of payment until retirement. The advantage of such plans lies in their potential for tax savings either as a result of favorable tax treatment granted to a particular plan or the more-general tax savings promised by the lower tax rates expected to apply to income in the post-retirement years. In addition, since the firm normally has opportunities for investment which promise returns in excess of the returns available to individuals, deferral has a higher value to the firm than its corresponding cost to the employee. Salary and bonus, the traditional remuneration plans that predominate in realworld pay packages, are found to be generally inefficient in providing a low-cost package of rewards. Their importance in the pay package, therefore, appears to be primarily a function of such considerations as the practical need of the employee for current cash. Stock options and other equity-based pay plans are found to be very inefficient in economic terms. Since lower-cost compensation plans can be designed to provide