Tax Framework Research Articles

Reconfiguring the Kazakhstan Pension System: How Can Canadian and OECD Experience Be Helpful?

This study examines the current state of Kazakhstan’s public pension system, comparing its performance and asset structure to OECD countries. It highlights structural and regulatory issues within the national pension market that hinder adequate retirement savings for the population. A key concern is the low real rate of return by the national pension fund, potentially jeopardizing its ability to meet future retirement needs amidst rising inflation. The study analyzes the Canadian pension system as a model, showcasing a three-layer structure that fosters diverse sources of pension benefits, ensuring sustainable income for retirees. It recommends considering group (employer-based) and private (individual) registered pension programs, common in developed countries, to generate additional pension income. Supportive legal and tax frameworks are crucial to encourage participation in these programs. Drawing on Canadian and OECD experiences, the study offers suggestions for reconfiguring Kazakhstan’s pension system to enhance its performance and sustainability, ultimately leading to higher pension payouts for future retirees.

Article: Income Tax Considerations Pertaining to Decentralized Autonomous Organizations (DAOs)

Over the last couple of years, an increasing number of organizations have arisen that are native to blockchain technology. Recent data shows that these decentralized autonomous organizations (DAOs) that are essentially ‘living on the blockchain’ are becoming increasingly popular. They are attracting substantial amounts of funds, operating both in the Web3 space and off-chain, and creating a significant source of novel tax issues. The existing tax academic research on DAOs is often limited to US domestic tax issues following from the DAO’s legal treatment. This article outlines (part of) the existing income tax landscape for the DAOs and some of the arising income tax challenges. The focus is on the general principles of domestic and international income tax systems. The authors argue that the DAOs create fundamental and practical tax issues potentially leading to income taxed ‘nowhere’. Existing tax frameworks cannot fully embed the DAOs and allow them to maintain their distinguishing features. The incorporation of DAOs does not necessarily solve the tax issues and even exacerbates them in certain cases. The authors call upon domestic and international legislators and policymakers to aim for more tax certainty for shareholders and further tax research of the DAOs.

Recuperation mechanism of direct taxation to control post covid economic contraction: India’s new tax reform with crypto tax

This study explores the impact of the progressive tax structure on income equality, emphasizing the significance of direct taxes in promoting economic and social equality. It also examines the challenges faced by the Indian government in meeting its revenue targets due to the decline in corporation tax and personal income tax revenues. The present study assesses the role of the newly implemented tax by the Indian Finance Ministry on capital gains from the sale or purchase of cryptocurrencies and its impact on economic growth. A qualitative approach has been adopted, utilizing secondary information sources for characterization and analysis. The study relies on Time Series Data from the Income Tax Department for the financial years 2000-01 to 2018-19 and global estimates of total tax revenues published by the International Centre for Tax and Development (ICTD). The findings indicate that the substantial decline in direct tax revenues necessitated a search for alternative sources of income. The separate taxation system for cryptocurrencies has legitimized digital assets and enabled the government to monitor transactions and capital gains. The introduction of the "Digital Rupee" aims to enhance the digital economy through efficient currency management. This research highlights the need for policymakers to develop a well-defined regulatory framework for cryptocurrency taxation. Clear regulations on cryptocurrency taxation and the "Digital Rupee" could help India boost its digital economy while ensuring better monitoring of crypto transactions and revenues.

Налоговый мониторинг в контексте правоприменительной практики

The article reveals the specifics of the functioning of tax monitoring as a form of tax control designed to improve the quality of interaction between taxpayers and tax authorities, replace traditional audits and reduce the administrative burden on business. Law enforcement practice is scrutinised, the study of which proves that tax monitoring, although having its advantages, contains some drawbacks, weaknesses and gaps. On the whole, they prevent the making of a predictable and stable tax framework for business activities.

The Effect of Law Number 7 of 2021 on Harmonization of Tax Regulations on Fiscal Justice in Indonesia

Law No. 7 of 2021 on Harmonisation of Tax Regulations is a landmark reform in Indonesia aimed at enhancing tax compliance, promoting fiscal justice, and aligning the country’s tax framework with international standards. This study provides a jurisdictional analysis of the law, examining its key provisions, impact on tax compliance, revenue collection, and socio-economic implications. The results show that the law has significantly broadened the tax base, improved tax transparency, and introduced progressive measures to promote equity, including a carbon tax and revised income tax brackets. However, challenges remain in ensuring that the benefits are distributed equitably across all income groups and sectors. The study concludes that while Law No. 7 of 2021 represents a significant step toward achieving fiscal justice, further refinement and support for smaller enterprises are required to fully realize its potential.

Environmental Policies and Tax Incentives in the Pillar Two Era: A Comparison of the EU and US Approaches

This article explores the interaction between global corporate taxes, specifically under the OECD’s Pillar Two, as implemented by the EU Minimum Taxation Directive (2022/2523) in the European Union and by the Corporate Minimum Tax (CAMT) in the United States, and fiscal incentives supporting environmental tax policies under the European Union’s Green Deal and the US Inflation Reduction Act (IRA). The article compares the EU and US approaches and reveals the impact on the investment strategies of MNEs, with a focus on the location of intangibles related to renewable energy technologies, as well as State aid considerations. The article proposes that, instead of marginalizing the green tax credits, they should be reshaped and made subject to a benchmark that supports sustainable innovation within the global tax framework.

Designing Net Asset-Based Income-Splitting Rules under Dual Income Tax

Abstract This article revisits the income-splitting regulations within the Nordic dual income tax framework. These regulations were introduced to counteract the inclination to transfer income between labor and capital income tax bases. They involve imputing a return on equity, considered as capital income, and taxing the residual portion at rates similar to those imposed on labor income. There are primarily two methods for computing imputed capital income. One method involves imputing a return based on the shares’ acquisition price (implemented in Sweden and Norway), while the other calculates a return using the net book assets of the company (utilized in Finland). This study examines the economic implications of the net asset-based splitting approach, an area not extensively explored in earlier literature. Our findings suggest that with appropriate selection of tax-parameter values, the net asset-based splitting system embodies the fundamental characteristics of a neutral corporate tax system akin to the ACE corporation tax. Consequently, our analysis indicates that the issues regarding incentive concerns in the Finnish taxation of closely held companies, highlighted in previous studies, stem more from erroneous parameter values rather than flawed underlying principles.

Dampak Kebijakan Pajak terhadap Preferensi Pertukaran Mata Uang Kripto: Analisis Kualitas dalam Konteks Regulasi yang Berkembang

This qualitative literature review examines the impact of tax policies on cryptocurrency exchange preferences within the context of evolving regulations. With the rapid growth of the cryptocurrency market, understanding the relationship between tax regulations and user behavior has become crucial. This study synthesizes findings from various research articles, highlighting how clear and transparent tax policies can influence user engagement and compliance in cryptocurrency trading. The review reveals that uncertainty regarding tax obligations often leads to user avoidance of cryptocurrency exchanges, while a better understanding of tax responsibilities correlates with more proactive investment management. Furthermore, the analysis indicates that cryptocurrency platforms demonstrating transparency in tax handling are preferred by users. The findings emphasize the necessity for governments to develop supportive tax frameworks and educational initiatives to facilitate healthy growth in the cryptocurrency sector. Overall, the research underscores the importance of regulatory clarity in fostering user trust and participation in cryptocurrency exchanges, ultimately contributing to a more robust and sustainable market.

Cross-Border Tax Ramifications of Swiss Blockchain Foundations: How Can a Rock Dam the Sea?

In this article, the authors explore some international tax concerns revolving around Swiss blockchain foundations, with a focus on the risk of triggering a permanent establishment where the resources working for such organizations are located and the need to determine an appropriate remuneration, in compliance with articles 5 and 7 of the OECD Model. In doing so, the authors envisage the need for revisiting the applicable tax framework, more in line with decentralized ways of working.

The Fate of Investment Entities under the Global Minimum Taxation Framework with a Focus on Italy

This article addresses the implementation of global minimum taxation in Italy and provides an initial assessment of its anticipated impact on investment entity structures and, more broadly, on the asset management industry. In particular, the article delves into the GloBE rules governing investment entities, providing insights on the relationship between the definition of investment entities provided by the Model Rules and those employed for accounting purposes by IFRS 10. Examples of the application of the GloBE rules to investment entity structures are provided, along with considerations on the possible operational and business consequences.

Unveiling the Variation in Corporate Tax Base Distribution Under the Formulary Apportionment

Abstract This paper reflects the tabled novel framework for corporate taxation in the European Union, founded on the Formulary Apportionment methodology and envisaged inclusion of intangible assets in the allocation formula. The objective is to simulate the variation between the currently used Separate Accounting and tabled Formulary Apportionment distribution of corporate tax base of companies active in the European Union. This paper exploits secondary microeconomic panel data obtained from the Orbis database for 77,087 subsidiaries affiliated with 2,283 parent companies observed from 2011 to 2019. The results reveal that the most significant relative declines of over 15% in the corporate tax base would be faced by Luxembourg, Malta, Cyprus, the Netherlands, and Ireland. In contrast, the biggest relative gains were accounted for Greece, Romania, Hungary, Estonia, and Latvia. If cross-border consolidation of losses is incorporated in the envisaged corporate tax framework, the EU-wide aggregate tax base reduces by 15, 67% over the examined years.

A Proposed Carbon Tax Framework for Malaysia and The Challenges of Implementation in the COVID-19 Economic Recovery Plan

A Proposed Carbon Tax Framework for Malaysia and The Challenges of Implementation in the COVID-19 Economic Recovery Plan

Optimization of business processes: commercialization of ideas, taxation, business ethics

Introduction. This paper explores the critical role of entrepreneurship in Ukraine's economy, particularly under the strain of ongoing military conflicts and the vulnerability of micro and small enterprises. The purpose of the paper is to thoroughly investigate the current challenges facing micro and small businesses in Ukraine, with a specific focus on optimizing entrepreneurial processes to withstand economic instability. The study seeks to develop a comprehensive framework that incorporates effective business strategies, ethical communication practices, and a streamlined taxation system to enhance the operational efficiency and profitability of these enterprises. By addressing these key aspects, the paper intends to contribute valuable insights into the stabilization and growth of businesses during times of crisis. Results. The research highlights several innovative findings crucial for the sustainability and competitiveness of micro and small businesses in Ukraine. First, the study identifies the necessity of continuous process optimization, including the elimination of inefficiencies and the enhancement of team collaboration. It emphasizes the importance of strategic business communications tailored to the needs and expectations of specific target audiences, ensuring clarity and engagement. The paper also explores the integration of ethical practices in business operations, advocating for transparency and honesty in dealings with clients and regulatory bodies. Furthermore, the analysis underlines the significant impact of a reformed taxation framework that supports business growth while ensuring compliance with legal standards. These findings underscore the interconnectedness of these factors and their collective impact on business resilience and market positioning. Conclusion. The study concludes that a multifaceted approach encompassing process optimization, ethical business practices, and strategic tax planning is essential for the survival and growth of micro and small enterprises in Ukraine's challenging economic landscape.

DEVELOPMENT OF APPROACHES TO THE TAXATION OF CRYPTOASSETS IN THE MODERN WORLD

In the article the dual economic nature of cryptocurrencies was analyzed same as investment assets and means of payment in foreign countries and Ukraine. It has been established that the asset and means of payment in foreign countries and Ukraine. It has been established that the classification of crypto-assets and their functions are of key importance for the introduction of their effective taxation. Approaches to the taxation of crypto-assets in various European countries, also in the USA, Malaysia, Singapore, Australia, India and other countries of the world have been studied. Taxation of such asset doesn’t have a unified nature and depends on the type of operation with them. According to research by Western scientists, it has been established that in modern word, cryptocurrencies are more often used for shadow operation than for tax evasion. The main principle that should be followed in the taxation of virtual assets is the principle of neutrality: taxation of cryptocurrencies should be carried out in the same way as similar traditional financial assets. In Ukraine, the legal framework for taxation of income operation with virtual assets (further – VA) is the stage of formation. In the work both draft laws “On the Legalization of Virtual Assets in Ukraine”, which were adopted at the end of 2023, are examined. Ones are proposing changes to the Tax Code of Ukraine regarding the procedure for taxation of VA and providing an opportunity to launch legislative regulation of the procedure for taxation of VA market. The differences between draft law on taxation of virtual assets have been highlighted in the work. Thus, it is proposed to tax VA according to the rules for securities or investment assets, which corresponds to the specifics of the domestic tax field

Review of the legal tax framework for digital platforms in Mexico

In recent years, Mexico has made significant advances in its legislation related to digital platforms, especially regarding their tax obligations. In this regard, this text seeks to delve into the Mexican tax system in order to understand its direct relationship with e-commerce, as it not only currently represents 5% of GDP but also experienced an almost doubling in just one year. It will explore how various laws regulate the actions of different digital platforms and how they seek to prevent international companies from making profits without paying taxes. Specifically, the 2021 tax reform and its relationship, application, and implications with digital platforms will be analyzed in detail. The analysis is based on the premise that said reform is a success of the Legislative Power. However, the need to adapt laws as Mexican society continues to adopt technology and carry out transactions in the digital market is also discussed.

Effect of Tax Policy Changes on Corporate Investment Decisions in Saudi Arabia

Purpose: The aim of the study was to assess the effect of tax policy changes on corporate investment decisions in Saudi Arabia. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study indicated that reductions in corporate tax rates generally lead to increased investment by companies. Lower taxes can free up funds that businesses then use for capital expenditures, research and development, and expansion projects. Conversely, higher tax rates may discourage investment, as they reduce after-tax profits and make certain projects less economically viable. However, the relationship between tax policy and investment decisions is complex and can vary depending on factors such as the overall economic environment, industry dynamics, and the specific details of the tax changes. Overall, though, there is evidence to suggest that tax policy plays a substantial role in shaping corporate investment behavior. Implications to Theory, Practice and Policy: Pecking order theory, agency theory and neoclassical investment theory may be used to anchor future studies on assessing the effect of tax policy changes on corporate investment decisions in Saudi Arabia. Policymakers and corporate leaders should collaborate to design tax policies that align with strategic investment objectives, fostering economic growth, innovation, and market competitiveness. The findings from research studies on the effect of tax policy changes on corporate investment decisions can inform evidence-based policymaking aimed at optimizing tax frameworks for economic resilience and dynamism.

The impact of taxation, technological innovation and trade openness on renewable energy investment: Evidence from the top renewable energy producing countries

In the context of contemporary global warming, transitioning from traditional fossil energy to renewable energy sources emerges as a crucial strategy to reduce carbon emissions and achieve the 7th sustainable development goal (SDG). Tax policy significantly shapes the investment landscape, influencing all factors concerning the transition to renewable energy, such as technological innovation and trade openness. However, no empirical studies have examined the direct and moderating role of taxation on renewable energy investment, mainly due to the scarcity of tax data. Therefore, this paper utilizes the recently released Government Revenue Dataset (2023) to explore the complex link between taxation, technological innovation, trade openness, and renewable energy investment for a sample of the top 37 renewable energy-producing countries during the period (1996–2021). The results of the cross-section ARDL (CS-ARDL) and the pooled mean group ARDL (PMG-ARDL) models indicate that taxation has a negative and significant influence on renewable energy investment across all model specifications, both in the short and long run. Conversely, innovation and trade openness exhibit a positive and significant influence on clean energy investment. Regarding the moderating influence of taxation, the results revealed that tax revenues depress the positive impact exerted by technological innovation and international trade. Furthermore, the fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models affirm the robustness of the long-run results obtained from CS-ARDL and PMG-ARDL models. The study's findings offer significant insights into how countries engaged in renewable energy production can enhance their taxation framework to leverage trade and innovation to promote renewable energy investment.

Optimization scheduling for low-carbon operation of building integrated energy systems considering source-load uncertainty and user comfort

Hydrogen, being a clean energy source, presents novel possibilities for the efficient exploitation of building energy. Nevertheless, the unpredictability in the production of renewable energy, the fluctuating demand from users, and the varying comfort needs within buildings provide substantial obstacles to the functioning of building energy systems. This work suggests an optimal technique for managing a comprehensive energy system based on hydrogen. The strategy takes into account the variability in energy sources and the need for user satisfaction. Firstly, a model of building integrated energy system (BIES) is created, which includes devices for utilizing hydrogen due to its adaptable qualities. Afterwards, the adaptable attributes of electrical, cooling, and heating loads within the building are carefully examined, resulting in the creation of a integrated demand response (IDR) model and a user-integrated comfort rating model. Moreover, a ladder-type carbon tax framework is implemented, employing robust optimization methods to tackle uncertainty in the production of renewable energy and demand. Finally, a model for optimizing the scheduling of energy system operation is formulated. A case analysis is performed utilizing a spacious office building located in the northern region as an instructive example. The findings indicate that the suggested approaches successfully control user involvement in demand response, decrease carbon emissions in the system, improve user energy comfort, and accomplish the economic, low-carbon, and comfortable functioning of BIES.

Corporate Income Taxation Dynamics: A Comparative Analysis of Portugal, Germany, Belgium, The Netherlands, and Luxembourg

This study seeks to undertake a comprehensive analysis and comparison of the corporate income tax systems across select European Union nations, with a specific focus on discerning disparities between the individual income tax (IIT) and corporate income tax (CIT) frameworks prevalent in Portugal, Holland, Belgium, Luxembourg, and Germany. With an institutional theory lens, we applied document analysis to describe the distinctive attributes characterizing each tax regime within the purview of competitive dynamics and fiscal competitiveness. Despite inherent limitations stemming from challenges in accessing tax-related information and potential oversights regarding socio-political determinants, this study underscores the imperative of grasping the intricate interplay between tax imposition levels and broader economic development trajectories. By furnishing valuable insights into prospective reforms pertaining to Portugal’s corporate income tax architecture, this scholarly inquiry significantly enriches our comprehension of tax competitiveness within the overarching framework of the global economic environment.

Constructing and implementing a green taxation system in China under the dual-carbon target

Reducing carbon dioxide emissions and achieving carbon neutrality have become hot topics of global concern. China has elevated its response to climate change to a national strategic level, where the green tax system plays a crucial role in implementing the dual-carbon strategy. This paper systematically analyzes the green tax systems of the Organisation for Economic Co-operation and Development (OECD)—encompassing environmental pollution taxes, energy taxes, vehicle and transportation taxes, and resource taxes. Based on this analysis, it proposes that China should establish a multifaceted green tax system including environmental protection tax, resource tax, and farmland occupation tax. Furthermore, it suggests an integrated approach combining systematic tax incentives such as corporate income tax, value-added tax, consumption tax, and vehicle purchase tax. This comprehensive green taxation framework, covering development, production, consumption, and emission stages, aims to drive high-quality green economic and social development through both tax incentives and restrictions, implementing a “dual-driving” mechanism. This study provides a basic framework and practical path for building a green tax system in China, especially studying the sources of different green taxes and their interrelationships, which enriches the theoretical and practical values related to taxation.