Income Tax Deductions Research Articles

A Tax Deduction for Home Office Expenditure: The Interpretation of and Proposed Removal of the Exclusive-Use Requirement in Section 23(b) of the Income Tax Act

Hybrid and remote working opportunities have become more prevalent, leading to an increase in attempts to claim income tax deductions for home office expenditure. SARS disallowed over R1.8 billion of the R2.9 billion home office tax claims in the 2021/2022 tax year. Unfortunately, efforts to lobby government to relax the requirements of section 23(b) of the Income Tax Act 58 of 1962 have not been met with legislative response. Section 23(b)'s exclusive-use requirement is particularly troublesome. Given the lack of legislative response, this article considers whether the exclusive-use requirement may be interpreted in a manner that would assist more taxpayers to claim a home office deduction. This article argues that the exclusive-use requirement does not require taxpayers to set aside an entire room to be able to claim home office expenditure. Unfortunately for taxpayers, it also finds that "exclusively" is not reasonably capable of bearing a meaning other than "solely" and that absent the application of the de minimis non curat lex rule, any private use of the home office space is fatal to the deduction of home office expenditure. The limited application of the de minimis non curat lex rule to dismiss insignificant private use offers no solution to taxpayers who live in modest homes and who necessarily work in mixed-use spaces. It also considers SAIT's proposal to tie the exclusive-use requirement to working hours through an interpretative argument and argues that it is unlikely to succeed. This article ultimately concludes that it appears as though taxpayers will find little relief from the exclusive-use requirement through interpretive arguments and must increase their efforts to lobby for legislative amendments instead. However, caution is required because SAICA's proposal that the exclusive-use requirement be removed through legislative amendment could trigger unintended consequences.

DAMPAK PENERAPAN TARIF PAJAK EFEKTIF RATA-RATA (TER) TERHADAP PERHITUNGAN PAJAK PENGHASILAN PASAL 21 WAJIB PAJAK ORANG PRIBADI KARYAWAN TETAP PADA PT. ANUGRAH SEKAYU

This descriptive research is aiming to analyze the impact of implementing TER on the calculation of PPh 21 WPOP for permanent employees at PT. Anugrah. The analysis technique is conducted by comparing calculation of PPh 21 WPOP based on tariffs 17 UU-HPP 7 of 2021 with TER based on PMK 168 of 2023. The secondary data is in the form of all income and calculation of PPh 21 for 32 WPOP permanent employees of PT. Anugrah. The results of this research show the calculation of PPh 21 WPOP a month for 32 permanent employees by applying TER is Rp 3,888,343, while the PPh calculation based on the article 17 rate is Rp 4,242,485. There is a difference in excess income tax deduction of Rp 354,142 a month. Implementation of TER can save taxes. It reduces tax burden and makes calculation process simpler and easier, so PMK regulation 168 of 2023 can reduce WPOP taxes, which is expected to increase awareness and voluntary compliance of WPOP. Apart from that, tax regulations have positive impact in increasing the amount of tax revenue. For this tax overpayment/withholding, request can be submitted for compensation.

Communication Patterns Between Companies and Female Drivers Pre- and Post-COVID-19 Pandemic: Evidence from Indonesia

This study aimed to investigate the conditions of Indonesian female drivers in the ride-hailing industry pre- and post-COVID-19 pandemic, focusing on communication patterns between companies in response to changes related to female drivers during these periods. The pandemic has significantly impacted many industries, including ride-hailing, with female drivers being disproportionately affected. Moreover, the pandemic has exacerbated existing workforce challenges for them, such as childcare responsibilities and limited access to transportation. Semistructured interviews with 12 female drivers were conducted in Bandung, Indonesia from March to October 2023. They were asked open-ended questions about their experiences and perspectives regarding their working conditions before and after the pandemic. The results showed that before the pandemic, female drivers faced harsh working conditions, including a higher order cancellation rate than their male counterparts due to social gender stereotypes. After the pandemic, these challenges persisted. They experienced income loss and encountered several abusive customers. Unfortunately, neither the companies nor the government provided adequate support in any of these circumstances. Even though companies have taken steps to protect drivers from coronavirus infection, they have maintained a monopoly and a gender discrimination policy. They have not been transparent about the order allocation system, income deductions, or the criteria for incentive points.

Kebijakan pajak dalam perdagangan melalui sistem elektronik

Kebijakan pajak dalam perdagangan melalui sistem elektronik

Tax Incentive and Venture Capital Fundraising

This study examines the determinants of fundraising of venture capital firms in South Korea, with a focus on the effects of tax incentives. Specifically, we investigate how macroeconomic factors, general partner (GP) characteristics, and changes in tax incentives affect venture capital fundraising at both the industry and GP level, using a novel dataset from the Disclosure Information of Venture Capital Analysis (DIVA). To isolate the effect of tax incentives, we consider as a treatment variable an increase in income tax deductions for individual venture capital fund investors in 2018 and estimate its effect on venture capital fundraising. The results show that the treatment group has a significantly higher probability of raising funds and raising a higher number and amount of funds than the control group has after 2018. To the best of our knowledge, this study is the first to examine the determinants of venture capital fundraising in South Korea and to empirically demonstrate the effect of tax incentives on venture capital fundraising.

Analisis Pemotongan, Penyetoran dan Pelaporan Pajak Penghasilan Pasal 23 pada PT. Wijaya Karya Beton Tbk PPB Sumatera Utara

One of the income taxes is Income Tax Article 23. In Income Tax Article 23 there is a process of withholding, depositing and reporting where if an error occurs in the process it can result in a shortfall in the amount of tax that should be deposited into the state treasury. Article 23 Income Tax Withholders are parties who pay income, namely government bodies, domestic corporate tax subjects, activity organizers, permanent establishments and other overseas representatives. This research was conducted at PT. Wijaya Karya Beton Tbk PPB. The aim of this research is to analyze the deduction, deposit and reporting of Income Tax Article 23 at PT. Wijaya Karya Beton Tbk PPB North Sumatra. The analytical method used is the descriptive method. Based on the research results, PT. Wijaya Karya Beton has implemented Article 23 Income Tax deductions and reporting in accordance with applicable tax regulations but PT. Wijaya Karya Beton TBK PPb North Sumatra in the implementation of income tax payment article 23 there are still things that are not on time, namely exceeding the deposit limit specified in Law Number 36 of 2008 concerning income tax article 23. In this research it can be concluded that PT. Wijaya Karya Beton has carried out its obligations properly in carrying out deductions and reporting Income Tax Article 23 and it is best that in carrying out the payment of income tax article 23 not exceed the deposit limit specified in Law Number 36 of 2008 concerning income tax article 23.

The Accounting Reflection of the Investment’s Tax Benefits

Purpose: The central objective is therefore to explain the tax benefits for investment and their reflection in the rendering of accounts, by understanding the broad concept of tax benefits, understanding the diversity that exists, with a particular focus on effectively demonstrating their applicability.
 
 Theoretical Framework: In view of the Portuguese economic context, the government has systematically created new programs and adopted tax measures aimed at granting tax benefits to promote the growth and economic development of companies. According to Teixeira (2008), the legislator establishes tax benefits with the aim of protecting the environment, encouraging savings, fostering employment and vocational training, preserving culture and cultural heritage, making incentives in tax systems crucial. In Portugal there are various types of tax benefits, such as income tax, tax deductions, investment tax and others. There are around 600 tax benefits that you can take advantage of if you consider all the conditions for their use.
 
 Design/Methodology/Approach: In this research, the tax benefit being analyzed will be investment, due to its importance in the business world and the complexity associated with it, making it an important instrument in terms of promoting competitiveness, supporting investment and, consequently, the economy of countries.
 
 Findings: It was possible to conclude that, except for the BFCIP, all the benefits are processed via IRC tax’s deduction and can’t be combined with other benefits of the same nature, except for RFAI and DLRR, which can be combined with each other if the limits aren’t exceeded.
 
 Research, Practical & Social Implications: This information can be used by any interested entitie to improve current conditions, optimize and enhance the usage of tax benefits for investment.
 
 Originality/Value: Tax benefits are a hot topic in the business world and beyond, given that they are a special tax regime that allows companies to have a tax advantage or relief compared to the normal one, helping them to have a lower financial impact by bearing less tax.

The Accounting Reflection of the Investment’s Tax Benefits

Purpose: The central objective is therefore to explain the tax benefits for investment and their reflection in the rendering of accounts, by understanding the broad concept of tax benefits, understanding the diversity that exists, with a particular focus on effectively demonstrating their applicability.
 
 Theoretical Framework: In view of the Portuguese economic context, the government has systematically created new programs and adopted tax measures aimed at granting tax benefits to promote the growth and economic development of companies. According to Teixeira (2008), the legislator establishes tax benefits with the aim of protecting the environment, encouraging savings, fostering employment and vocational training, preserving culture and cultural heritage, making incentives in tax systems crucial. In Portugal there are various types of tax benefits, such as income tax, tax deductions, investment tax and others. There are around 600 tax benefits that you can take advantage of if you consider all the conditions for their use.
 
 Design/Methodology/Approach: In this research, the tax benefit being analyzed will be investment, due to its importance in the business world and the complexity associated with it, making it an important instrument in terms of promoting competitiveness, supporting investment and, consequently, the economy of countries.
 
 Findings: It was possible to conclude that, except for the BFCIP, all the benefits are processed via IRC tax’s deduction and can’t be combined with other benefits of the same nature, except for RFAI and DLRR, which can be combined with each other if the limits aren’t exceeded.
 
 Research, Practical & Social Implications: This information can be used by any interested entitie to improve current conditions, optimize and enhance the usage of tax benefits for investment.
 
 Originality/Value: Tax benefits are a hot topic in the business world and beyond, given that they are a special tax regime that allows companies to have a tax advantage or relief compared to the normal one, helping them to have a lower financial impact by bearing less tax.

The Validity of Personal Income Tax Deductions: Analyzing Expenses for Children’s Education in Private Schools in Moscow

Tax incentives are commonly used to support various sectors and population, and this study delves into the realm of deductions for the personal income tax (known as NDFL in Russia). We explore differing perspectives on these deductions, considering them either as investments in human capital for future income growth or as a form of government-initiated financing for specific sectors. Focusing on deductions related to children’s education expenses in private schools, the research evaluates the effectiveness of budgetary investments in this sector. Using DEA analysis, the study assesses private schools based on factors like teacher-student ratios, classroom space per student, and access to computers and educational literature. The learning outcomes were measured by the number of high performers in the Unified State Exam and the number of 9th-grade graduates with certificates of distinction. The evaluation of learning outcomes reveals that many private schools in Moscow prioritize comfort over educational standards and the majority of them perform below the average levels in terms of effectiveness. The findings prompt questions about the feasibility of including private school expenses in personal income tax deductions. The proposed approach recommends tying eligibility for these deductions to the effectiveness of private schools, ensuring a more targeted and impactful use of tax benefits.

Налоговый вычет на обучение как фактор стимулирования спроса на платные образовательные услуги

The social tax deduction for personal income tax on education is one of the state tools to stimulate demand for paid educational services. The increase in its volume corresponds to the tasks on the agenda of increasing the fairness of income taxation and smoothing the social inequality of citizens. The relevance of the study of the possibilities of improving the deduction for education will increase due to the fact that the level of education of citizens, various opportunities for Russians to access education, low intergenerational mobility are among the factors of high social differentiation. The subject of the study is the personal income tax deduction. The purpose of the work is to substantiate the possibilities of a personal income tax deduction for training in the process of ensuring the smoothing of social inequality of citizens by increasing its demand by taxpayers and providing it in a proactive mode. According to the results of the sociological survey, a decrease in the demand for the deduction for tuition with an increase in taxpayer income, unlike other personal income tax deductions. According to the results of correlation and regression analysis, a high feedback relationship between the level of social inequality of citizens and the amount of social tax deduction for education was established, which indicates the presence of a significant potential for deduction for education in smoothing social inequality of citizens. Conclusions are drawn about the high demand for the social tax deduction for education against the background of a slowdown in the volume of its provision in comparison with other tax deductions. Promising areas for improving the provision of social tax deduction for training are differentiation of categories of recipients, indexing of limits and simplification of the procedure for obtaining them.

Income tax deduction as a tool to mitigate catastrophic health expenditure for cancer care falls short of its purpose in India

Income tax deductions aimed at alleviating the financial strain of catastrophic health expenses, prove inadequate in supporting cancer care in India. First, the stringent eligibility criteria for accessing this tax deduction restrict its availability to a narrow segment of the population. Typically, it is granted only to those who receive treatment at government-sanctioned medical facilities. Consequently, this deduction excludes a substantial number of patients, intensifying their financial woes. Moreover, the maximum deduction amount, despite sporadic revisions, falls short in the face of skyrocketing cancer treatment costs. The current structure of the income tax deduction does little to alleviate this burden, as the deduction often pales in comparison to the actual costs incurred. Rather than dissolution of this provision in the new tax regime, we propose a reform and reevaluation of the income tax deduction framework to ensure it genuinely fulfills its role in alleviating the financial strain of cancer care in India.

OTT구독료 소득공제 도입 논의와 타당성 검토

Since the income deduction system for the expense amount of credit cards and cash receipts was first introduced at 「Restriction of Special Taxation Act」 in Korea, the benefits have also been expanded for traditional market use, public transportation use, and cultural expenditure. In particular, the cultural expense income deduction included the purchase of books and newspapers, ticket payment for performance halls and museums, and the purchase of movie tickets from July this year. In addition, the Ministry of Culture, Sports and Tourism ordered research services to incorporate OTT monthly subscriptions into credit card deductions as cultural expenses, and the National Assembly proposed a partial revision to the 「Restriction of Special Taxation Act」 in July this year. This is because tax cuts on OTT subscription fees can help not only promote people's cultural life but also secure the competitiveness of the OTT industry.
 Tax reductions should be able to take effective measures to achieve the policy objectives pursued by the government, along with a close review of the effects of each income class from the perspective of tax egalitarianism. However, the current credit card income deduction system aims to reveal the tax base of businesses rather than reduce the tax burden on the people, and there is a limit to continuously and stably operating the system due to the limitation of the sunset period under the 「Restriction of Special Taxation Act」.
 Therefore, tax cuts for OTT subscriptions should be legislated in consideration of the improvement of the system to maintain the current cultural expense deduction in preparation for the reduction or abolition of credit card income deductions in the future. In the long run, it is necessary to consider revising the 「Income Tax Act」 etc, not the 「Restriction of Special Taxation Act」, to introduce tax benefits for cultural expenditures as special tax credits or to designate them as VAT exemptions. On the other hand, tax cuts for companies should also be designed to benefit from the revitalization of the cultural content industry. However, in order to prevent tax avoidance of overseas companies, it is necessary to incorporate it into a system that can manage the sales of OTT subscriptions of the operator, such as the current cultural expense income deduction system used by the Ministry of Culture, Sports and Tourism.

Peluang dan Tantangan Pemberlakuan Undang-Undang No. 23 Pasal 22 Tahun 2011 Tentang Zakat Sebagai Pengurang Pajak Penghasilan

The obligation to pay zakat and the obligation to pay taxes for Muslims causes double charges or double burdens so that it will make it difficult for property owners and cause counterproductive effects. As a solution so that zakat must not be exposed to a double burden, the government issued a regulation, namely Law Number 23 of 2011 article 22 concerning zakat as a deduction from income tax. The purpose of this study is as one of the socialization efforts to muzakki on zakat as an income tax deduction and provide a positive perception of zakat and tax management. The methods used are qualitative approaches with the type of field research (field research) and data analysis using qualitative descriptive methods. From the results of research and analysis on zakat regulations as income tax deductions cannot be implemented, because there is no cooperation between BAZNAS and Primary Tax even though there is clearly a law regulating it. The lack of socialization carried out by BAZNAS makes the muzakki unaware of the law on zakat as an income tax deduction and there are still many muzakki handing over their zakat directly to those who are entitled to receive it because the reach is easier.

Can landlords siphon housing allowances? New theory and evidence on housing allowance algorithms from a natural experiment

This paper provides new evidence on the incidence and theoretical predictions of housing allowances. It offers a comprehensive reexamination of allowance algorithms, to shed light on their objectives and impacts, while also addressing empirical modelling considerations and identifying limitations in literature. Notably, it offers readers a comparative analysis by investigating US vouchers as a reference point. Theoretically, I find housing allowances are typically neither a price nor income equivalent. Housing allowance schemes,mostly being universal in functional form across countries, manifest as personal subsidies inverse to resources i.e., some benefit amount minus income deduction. I discover that New Zealand's Accommodation Supplement (AS) manifests as a negative income and wealth tax benefit which, over time, is regressive to rents and incomes. Empirically, I estimate the effects of an increase in costs and demand for the AS on rents exploiting a panel of housing markets geocoded using census tracts at Area Unit (AU) level. The rent model extends, using Geographically Weighted Panel Regression (GWR) to control for any time-variant neighborhood spillover effects on rents. Costing NZ$ 5.225 billion over 2006–2013, AS for renters was not demand deterministic and had no significant direct impact on the revenues of low-income landlords. An increase in subsidy demand coincides with possible overcrowding whereas has no impact on increasing rental supply or a move into renting.

Summaries of Articles

Summaries of Articles

The dynamic relationship between green tax incentives and environmental protection.

The purpose of this study is to examine the impact of green tax incentives such as investment tax credit and taxable income deductions related to the environmental sustainability and climate change which are becoming more popular in developing countries, whereas introducing green tax incentives related to the environment and climate change helps and meets the sustainability objectives of growth and development. For this purpose, we selected the top 100 listed companies on the Swedish stock market (SSM), Nasdaq Stockholm (SN), in order to better understand the real facts and figures of green tax environment. This study uses a longitudinal research design because sample observations vary across firms and over a short time and conducts probit and logistic regression to identify the beneficiaries of the tax incentives. The findings show that different firm-level characteristics significantly impact the probability of being an ITC beneficiary.

Analysis of tax law on income tax for construction services business

This study aims to analyze the implementation of the provisions Article 4 paragraph (2) letter d of the Income Tax Law and Article 23 paragraph (1) letter c number 2 of the Income Tax Law regarding the withholding of income tax for construction services businesses and the application of deductions to Article 23 paragraph (1) letter c number 2 of the Income Tax Law regarding business income tax deductions construction service? This research was conducted at CV. Mandala Putra and Office Services, counseling, and tax consulting in North Toraja Regency. The method used in this study was field research where data collection was carried out by interviewing and taking into account the books and applicable laws and regulations. The data obtained were then analyzed qualitatively and presented descriptively. The results of this study indicate: 1). Implementation of the provisions of Article 4 paragraph (2) letter d and Article 23 paragraph (1) letter c number 2 of the Income Tax Law related to the withholding of income tax for construction services businesses, namely the existence of a qualification requirement intended in the form of a business entity certificate issued by a construction service development agency for tax imposition which are final due to certificates and non-certified business entities are subject to non-final tax 2). In applying the tax of Article 23 paragraph (1) letter c number 2 in the construction service business, it is carried out by the cutting party by first making a billing ID, then paying it through a Perception Bank that has been approved by the Ministry of Finance. The payment due date is the 10th, one month after the month the income tax is due. After that Reporting is done by the cutting party by filling out Periodic Income Tax Return Article 23, then you can report it through the online tax report feature or free efiling on Online Tax. The reporting due date is the 20th, a month after the month the income tax is due.

Income Tax Deduction Benefits under Various Sections of the Income Tax Act for the Expenditure on Medical Treatment of Disabled Dependent

Income Tax Deduction Benefits under Various Sections of the Income Tax Act for the Expenditure on Medical Treatment of Disabled Dependent

Теория и практика определения действительного налогового обязательства индивидуального предпринимателя по НДФЛ

The subject of the study is the mechanism for calculating personal income tax by tax authorities for individual entrepreneurs, used in the tax system of Russia in the implementation of tax control. The author solved an analytical problem consisting in the formulation of an urgent and acute problem of excessive calculation of personal income tax by tax authorities for individual entrepreneurs, and determined the optimal way to eliminate it. The purpose of the work is to establish the optimal way to solve the problem of excessive calculation of personal income tax by tax authorities in relation to individual entrepreneurs in the implementation of tax control. In the course of the study, based on the consideration of the results of taxation of individual entrepreneurs, analysis of the regulatory framework, it was found out that when tax control is carried out, the tax authorities do not fully take into account the expenses of individual entrepreneurs, which causes artificial overestimation of net income for them and, consequently, economically unjustified taxation. Thus, it is established that the practice of tax control contradicts the theory of taxation. The article concludes that arbitrary manipulation of expenses by the tax authorities, which often turns personal income tax into a tax on gross income, should be excluded from the practice of taxation of individual entrepreneurs. To do this, it is proposed to abolish the provision of the Tax Code of the Russian Federation on the 20% professional personal income tax deduction for individual entrepreneurs and use the calculation method instead when determining their income.

Personal Income Tax Deductions and Demand for Education: Case of Russia

Tax system creates various incentive effects that can influence an individual’s educational choice. Many studies have been conducted on the effect of tax incentives on education, however, no study that reveals such an effect has been conducted in Russia. With this in mind, we aimed to analyse whether the tax incentives for education influence the household’s decisions to receive an education in Russia. In this context, we analysed the correlation between the number of individuals who received tax deductions and the number of individuals who received education by regions of the Russian Federation. The data source was tax reporting data of Federal Tax Service and the 2020 census data. The research methodology includes methods of regression and correlation analysis. The results show that tax incentives for education have low impact on the of household’s decisions to receive an education in the Russian Federation. Tax deduction has a stable but weak positive association with total numbers of students. The calculated parameters of the model explain the dependence between the deduction for expenses for own education and quantity of people who receive education by 9.2% and dependence between the deduction for expenses for full-time education of children and quantity of people who receive education by 5.5%. There is low probability that the announced rise of the limit of social deduction in 2024 will change the situation. But government should continue to provide federal funding through tax benefits to promote voluntary compliance by fostering favourable taxpayer views of the tax system.