Tax Implications Research Articles

Equity implications of tobacco taxation: results from WHO FCTC investment cases

BackgroundAcross time, geographies and country income levels, smoking prevalence is highest among people with lower incomes. Smoking causes further impoverishment of those on the lower end of the income spectrum...

COMPARATIVE STUDY OF DEBT AND EQUITY FUNDS IN INDIA

The purpose of this study is to examine the features of debt and equity funds in the Indian financial market, including their suitability, liquidity, tax implications, risk-return profiles, and other relevant factors. Through the purchase of fixed-income assets such as government bonds, corporate bonds, and money market instruments, debt funds look for investments that have low volatility and consistent returns. Equity funds, on the other hand, have a significant amount of their assets invested in equities, which can result in increased volatility but may also result in higher returns over the long term. According to the findings of the study, equity funds have the potential for bigger returns, while debt funds have a lower risk profile. This is the conclusion reached after comparing the two types of funds. Furthermore, the study investigates the tax consequences of both types of funds, which is crucial because taxes play a large influence in the decisions that are made regarding investments. Debt funds are subject to the short-term capital gains tax if they are kept for a period of time that is shorter than three years. The tax rate on long-term capital gains, on the other hand, is twenty percent, and indexation advantages are included. For equities funds that have been held for more than a year, the tax rate is 10% without indexation on profits that exceed ₹1 lakh. However, the tax rate for gains that are held for a shorter period of time is 15%. This study also investigates liquidity, which is another important factor to consider. Due to the greater liquidity of debt funds in comparison to individual fixed-income instruments, investors have more flexibility to withdraw their money from debt funds when they require it. This is because debt funds have better liquidity. It is possible for the underlying stocks of an equity fund to have an effect on the liquidity of the fund. In general, large-cap funds have superior liquidity than small-cap funds or sector-specific funds. In addition, the various investor profiles and the ways in which debt and equity funds are incorporated into their portfolios are discussed. Those who are retired, conservatives who are looking for returns with a reduced level of risk, or investors who have time horizons that range from short to medium are suitable candidates for debt funds. On the other hand, equity funds are more suitable for long-term investors who are willing to take on a greater degree of risk in the expectation of potentially bigger returns. Additionally, they are an excellent choice for individuals who are interested in riding the stock market's growth wave. Although debt and equity funds are complementary additions to any investor's portfolio, they perform distinct functions and have distinct risk-return profiles. Nevertheless, they are both beneficial to the investor. Prior to making decisions on investments, investors should do a comprehensive evaluation of their level of risk tolerance, investment horizon, and financial objectives. They ought to also give some thought to the possibility of diversifying their investments across a variety of asset classes. A comparative analysis like this one will prove to be a very useful resource for individuals who are considering making investments in India's financial markets. Keywords:- Debt funds, Equity funds, Risk-return profiles, Taxation, Liquidity, Investment suitability, Indian financial market.

Tax implications of leasing vs. purchasing: a comprehensive analysis of the impact on firms and government tax revenue

ABSTRACT The decision between leasing and purchasing can significantly influence a firm’s tax responsibilities, potentially impacting government tax revenue. This study aims to conduct a thorough analysis and measurement of the tax implications on the asset’s user or lessee, lessor, and government tax revenue. It also considers the revised U.S. Generally Accepted Accounting Principles (GAAP) standard under ASC 842 and the Tax Cuts and Jobs Act (P.L. 115–97), which have been recently implemented. Through analytical and numerical examinations, our objective is to provide a comprehensive understanding of how leasing practices impact the financial position of firms and government tax revenue.

Tax Litigation and Corporate Debt: A Brazilian Perspective

Objective: The study aims to explore the impact of tax litigation on the indebtedness levels of Brazilian firms. The research is motivated by Brazil's high volume of tax disputes and the lack of existing studies focusing on the relationship between tax litigation and firm indebtedness in this particular context.
 Method: The sample includes non-financial firms listed on the Brazilian stock exchange from 2017 to 2022. Linear regression methodology, utilizing panel data and fixed effects, was employed to analyze the relationship. Tax litigation was quantified by summing tax provisions and contingent liabilities, which were then relativized by the firms' total assets. Data were sourced from Comdinheiro software, with additional information manually gathered from company explanatory notes.
 Results or Discussion: The study found a positive relationship between tax litigation and firm indebtedness in Brazil. This suggests that companies involved in more tax disputes tend to have higher levels of debt, pointing towards a complex relationship between the two variables in the Brazilian economic landscape.
 Contributions: This research fills a gap in existing literature by investigating the effects of tax litigation on the capital structure of Brazilian firms. It provides valuable insights that can be beneficial for policymakers, regulatory bodies, and firms in understanding the implications of tax disputes on financial strategies.
  

Italian resident individuals with interests in Liechtenstein entities: notes on Italian income taxes—Part 1

Abstract It is not uncommon for Italian resident taxpayers to resort to Liechtenstein entities to take advantage of the benefits that they can offer, like asset protection, confidentiality and favorable taxation. This article tries to address some of the Italian income tax implications that Italian resident individuals with interests in Liechtenstein entities should consider. Part 1, after providing an overview on the recent agreement for the elimination of double taxation stipulated between Italy and Liechtenstein, focuses on Liechtenstein foundations and establishments, also covering the potential advantages that may derive from the combination of the Italian lump sum tax regime with the use of these legal entities. Part 2 (to be published soon in 2024), will deal with Liechtenstein limited companies and “the Italian Controlled Foreign Companies regime”.

Local government debt and corporate tax avoidance: Evidence from China

Leveraging a large sample of publicly listed companies in China from 2010 to 2021, this study investigates the impact of local government debt on corporate tax strategies. We provide compelling evidence that the scale of local government debt is positively associated with corporate tax avoidance. In addition, we find that corporate leverage ratios, financial constraints, and debt financing costs are three plausible mechanisms underlying the relationship we identified. The tax implications of local government debt are more evident among non-SOEs, small firms, and firms in financially less-developed regions. Our key findings are robust to a battery of identification strategies. Overall, this study enriches the literature on government debt and corporate tax avoidance.

Article: Digital Services Tax: Analytical View of Challenges and Successes in Kenya and the United Kingdom

The rapid expansion of digital services is dramatically reshaping the panorama of global taxation. This transformation is notably impacting multinational enterprises (MNEs) that operate in countries where they lack a physical presence. In this study, the authors focus the attention on the implications of digital services offered by these non-resident MNEs operating in the Republic of Kenya and the United Kingdom and representing developing and developed economies, respectively. The article delves into how the burgeoning digital economy challenges international tax laws by scrutinizing the implementation of the digital service tax (24DST) and highlighting the weaknesses of the two-pillar plan in comprehensively addressing the digitalization of the economy. It also broadens the comprehension of the unique obstacles and potential opportunities inherent in the digital economy from an international taxation perspective. The significance of this research lies in its potential to inform tax policy in an increasingly digitalized global economy. Policymakers can develop strategies that are more effective in ensuring fair taxation practices by understanding the nuanced interactions between digital services and international tax regulations. Additionally, MNEs can use this research to better navigate the complex tax implications of their digital services in various economic contexts and thereby foster sustainable and ethical business practices. Digital economy, digital service tax (DST), Kenya, multinational enterprises (MNEs), organisation for economic co-operation and development (OECD), pillar one and pillar two, taxation, tax base, unilateral tax measure, United Kingdom (UK).

Knowing what you pay for: Does benefits information increase bond referenda support?

AbstractThis article examines the impact of including benefits information on voter support in school bond referenda. It proposes that benefits information can increase voter support and mitigate the negative impact of tax implications. The proposition is tested empirically through a survey experiment, using random assignment and a nationally representative sample. The findings provide causal evidence supporting the proposition, revealing a consistently positive effect of benefits information on voter support across diverse population groups, including homeowners, individuals without children, and supporters of private education. The effect weakens but remains significant even when tax implications are considered. These findings contribute to the existing literature on bond referenda and offer valuable insights for public policy makers aiming to enhance success rates in bond referenda.

Tax Aspects of Mergers and Acquisitions in Bangladesh

In this article, the authors discuss the key tax aspects associated with M&A in Bangladesh. This article provides an overview of the tax aspects of M&A in Bangladesh, the common M&A investment structures, the tax implications for asset and share deals, financing and mergers in Bangladesh. The article concludes with a discussion on the taxation of indirect share transfer rules in Bangladesh.

FINTECH, TAXATION, AND REGULATORY COMPLIANCE: NAVIGATING THE NEW FINANCIAL LANDSCAPE

The emergence of financial technology (Fintech) has revolutionized the global financial landscape, offering innovative solutions that challenge traditional banking systems and investment practices. This review explores the intersection of Fintech, taxation, and regulatory compliance, highlighting the complexities and opportunities within this dynamic ecosystem. Fintech encompasses a wide range of technologies, including blockchain, artificial intelligence, and mobile payment systems, which have streamlined financial services and expanded access to capital markets. However, this rapid evolution poses significant challenges for taxation and regulatory frameworks. Traditional tax laws struggle to keep pace with the speed and complexity of digital transactions, leading to uncertainties in tax treatment and enforcement. Navigating the tax implications of Fintech requires a nuanced understanding of digital assets, decentralized finance (DeFi) platforms, and cross-border transactions. Tax authorities worldwide are grappling with these challenges, seeking to balance innovation and compliance while ensuring a fair and transparent tax regime. The review examines various approaches adopted by governments and regulatory bodies to address Fintech taxation, including legislative reforms, international cooperation, and the use of advanced data analytics. Furthermore, regulatory compliance remains a critical concern for Fintech firms, as they must navigate a labyrinth of rules and standards across jurisdictions. Compliance requirements vary widely, ranging from anti-money laundering (AML) regulations to data protection laws, presenting operational and legal challenges for market participants. The review discusses strategies for achieving regulatory compliance in the Fintech sector, emphasizing the importance of proactive risk management, regulatory engagement, and technological solutions such as RegTech. Despite these challenges, the convergence of Fintech, taxation, and regulatory compliance offers immense opportunities for innovation and growth. By embracing digital transformation and adopting agile regulatory frameworks, governments and businesses can unlock the full potential of Fintech while safeguarding financial stability and integrity. This review provides insights into the evolving landscape of Fintech taxation and regulatory compliance, highlighting key trends, challenges, and best practices for navigating this new frontier in finance.
 Keywords:  Fintech, Taxation, Financial, Technology, Review.

Multijurisdictional Taxes: A Tax Research and Planning Case Using Major League Baseball (MLB) Players

ABSTRACT This case examines the tax implications of working in multiple tax jurisdictions. Students are presented with a case that considers the allocation of taxable income for a player in the MLB based on state income tax laws. This allows students to gain a more complete understanding of the impact of state and local taxes on total individual tax burden. It also challenges students to think critically about tax planning strategies that can be implemented to minimize tax liabilities when dealing with multiple tax jurisdictions. Finally, the case provides an opportunity for an instructor to engage students in tax research at an appropriate level for the course. The case can be adapted to use in undergraduate and graduate courses for individual taxation, state and local taxation, or tax research. Student responses indicate that they find the case interesting and beneficial in improving their understanding of state tax issues.

Bearing the burden — Implications of tax reporting institutions on evasion and incidence

We investigate effects of tax reporting institutions on evasion and incidence using an experimental double auction market. We find that 28% of the sellers are truthful when only sellers report, but that 88% and 64% of them are truthful under costless and costly third-party reporting by buyers, respectively. Reporting behavior therefore responds to the intensity of deterrence. However, we find that prices do not fully reflect the lower taxes of the evaders. Thus, when sellers can unilaterally evade taxes, tax incidence deviates from the prediction of the standard model, and there is deadweight loss even if tax revenue is low. Pricing, incidence, and reporting patterns in all treatments are consistent with a model with heterogeneous lying costs, or a combination of lying costs and image concerns that give rise to a motivation to appear honest.

Exploring Tax Policy Changes and Foreign Direct Investment Inflows in the Indian Economy

The Indian Economy has been witnessing growth since the onset of 21st century at a phenomenal pace in which Foreign Direct Investment inflows has played a significant role. Foreign Direct Investment and taxes are two distinct phenomena where taxes are dependent on the macroeconomic regulatory framework subject to amendments from time to time. Foreign Direct Investment covers a broad perspective where it is affected by numerous macroeconomic and global phenomena. However, it also involves foreign investor’s perception regarding the tax structure of the host country. This paper tries to establish a relationship between taxation and FDI inflows in the context of Indian Economy. This paper further attempts to study the implications of tax structure and its changes in Foreign Direct Investment inflows in Indian Economy. This study explains the significance of taxation as a determining variable in Foreign Direct Investment inflows. Key Words: Foreign Direct Investment, FDI inflows, Taxation, Tax Implications, Tax Structure, Indian Economy.

Securitization Of Ultra Micro Financing Asset In The Form Collective Investment Credit Of Asset-Backed Securities: Conceptual Design And Tax Implication In Indonesia

The Government's concern for a micro-based economy has materialized through the provision of Ultra Micro (UMi) Financing to Micro, Small, and Medium Enterprises (MSMEs) by the Government Investment Center Public Service Agency or Badan Layanan Umum Pusat Investasi Pemerintah (BLU PIP). UMi financing, as part of program credit, aims to promote self-reliance among micro-businesses that are not facilitated by the banking sector. However, limited capital from the APBN can hinder the desirability of this credit program. In order to leverage UMi financing hence it can be benefitted by more MSMEs beyond the capabilities of the APBN, the Government should diversify the funding sources for micro-businesses, not solely relying on the State Budget (APBN) but also incorporating funds from other sources. To realize this objective, the Government, through BLU PIP, can securit of receivables of Ultra Micro Financing in the form of Collective Investment Credit for Asset-Backed Securities (CIC-ABS). The objective of this research is to propose a conceptual design of CIC-ABS of UMi and examine tax implication of CIC-ABS of UMi in Indonesia. The question in this research is how to create a conceptual CIC-ABS UMi that is suitable for implementation and what are the tax implications in Indonesia. The contribution of this research is that it is pioneering concept of asset leveraging of MSME credits through Collective Investment Credit for Asset-Backed Securities (CIC-ABS) and tax implication in the unique context of Indonesia. The methodology used in this research includes the conceptual design of securitization and qualitative description to analyze tax implication of securitization of UMi's financing in the form of CIC-ABS in Indonesia. The conclusion that can be drawn from this research is that the UMi CIC-ABS conceptual design is suitable for implementation in Indonesia and tax implications are CIC-ABS of UMi subject to Corporate Income Tax at 25%, Originator incurs Corporate Income Tax on profits from the transfer, ABS Holders face varying tax treatments based on ABS class, and CIC-ABS of UMi is exempt from Value Added Tax (VAT).

A Conspectus of Private Partnerships in Nigeria: Structures and Tax Implications

A Conspectus of Private Partnerships in Nigeria: Structures and Tax Implications

Вогнепальна зброя як об’єкт спільної сумісної власності подружжя при розподілі майна

Ukraine is a democratic state governed by the rule of law, that is, one whose legislation should maximally respect the fundamental rights and freedoms of a person and a citizen. In any time, and especially as difficult as now, it is important to have effective functioning of all possible ways to protect and implement these fundamental rights. It is important in our time to observe the right to a fair trial. Yes, many cases are resolved in court, but recently cases about the distribution of property have become widespread. Family law cases involve many important legal issues such as divorce, legal separation, property and debt division, child custody and visitation, child and spousal support, business valuation, health and life insurance, tax implications, parenting and pensions . Problematic issues in cases about the distribution of property of spouses, acquired under the right of common co-ownership during the period of marriage, appear more and more often in modern judicial practice. Thus, a husband and wife who have expressed a desire to dissolve their marriage are not always able to voluntarily agree on the division of property on their own. Therefore, a large number of such cases are resolved in court, and quite often controversial issues arise that are not always regulated by current legislation. An interesting issue is the distribution of weapons acquired during marriage. In many of these situations, you may think that having the gun registered in your name is all that is needed to preserve ownership in a divorce. Unfortunately, this is not the case. Even if each of your firearms is registered in your name alone, this will not affect the final asset distribution decision made by the court. If the weapon was purchased during the marriage, it will be considered joint property regardless of the registration documents. Therefore, a weapon cannot be considered an object of individual use by one of the spouses, and therefore is not personal private property.

Legal and tax implications of agrophotovoltaics as regards property tax

This article is an attempt to respond to the question if the current regulations of the Local Taxes and Fees Act are sufficient to determine the tax consequences of the agrophotovoltaic activity. At the beginning of the article, the concept of agrophotovoltaics and its benefits in relation to both the conditions of conducting business activity and electricity generation are presented. The later part of the article treats the legal and tax consequences of the agrophotovoltaic business, which depend on the taxpayer's attitude to obtaining profits from the agrophotovoltaic business in relation to the simultaneously conducted agricultural business. For the section of the article on the agrophotovoltaic business itself, an analysis of English-language academic articles that describe the experience of this type of business was used. A critical analysis of the existing jurisprudence of the administrative courts was used to present the legal and tax implications.

The Voluntary Carbon Market – Fast-Changing Landscape and Tax Implications

As the voluntary carbon market gets more mature, market participants are faced with significant tax and regulatory challenges that can create uncertainty and may hamper the market’s development. This article provides an overview of the fast-changing landscape and illustrates a number of the policy, legal and tax questions that will be increasingly pressing in the years to come.

Optimal Contract Under Endogenous Platform Services: Implications of Tax and Advertising

The paper evaluates the contracting problem between a platform and a seller under information asymmetry where the seller holds private information about his/her cost for product quality. Price per product is influenced by seller’s product quality and platform’s service quality. Cost-sharing contract is more desirable as it induces a higher level of qualities and generates higher profit for the platform compared to revenue-sharing contract. The product quality and platform’s service quality vary negatively with the ad-valorem tax imposed on price of the product. We then introduce advertising in our model and observe that the level of advertising is lower under information asymmetry. JEL Classification: D86, L21, M37

Cross-Border Remote Working: Singapore and Malaysia Tax Implications

In the context of cross-border remote working, the tax implications of remote work arrangements have grown to be an area of great interest and yet still present several difficulties and confusion. This is particularly so when two neighbouring countries have a long history of high-volume frontier workers who cross borders daily. Such is the situation of Singapore and Malaysia, which this article takes a look at.