Income Tax Regime Research Articles

Preferential Personal Income Tax Regimes in the European Union: A New Form of Permitted (Harmful) Tax Competition?

The aim of this contribution is to examine whether the current normative framework of the European Union is adequately equipped to deal with the potentially harmful effects of the so-called preferential personal income tax regimes (PPITRs). For that purpose, after providing an overview of these special tax measures within the EU landscape, the article analyses whether these regimes could be considered a new form of harmful tax competition under the international soft law instruments developed by the OECD and European Union. It is highlighted that these instruments at present do not cover personal income tax rules, although the effects of PPITRs can be as harmful as those of preferential corporate income tax regimes. With regard to other EU instruments (State aid rules, fundamental freedoms and the fundamental right to equality), it is concluded that they are not adequate to tackle in a systematic way the potential harmful effects of special tax regimes targeting individuals. To remedy this hiatus, a proposal is made to extend the mandate of the EU Code of Conduct and adapt the currently applicable criteria under the Code to enable it to capture harmful PPITRs.

Pay dissatisfaction and withdrawal behaviour of employees in the civil service: does personal income tax regime matter?

PurposeThe aim of the study is to explore the links between multiple personal income tax regimes, pay dissatisfaction, employee lateness and absenteeism. Accordingly, this paper examines the relationships between income tax policies, pay dissatisfaction and the work withdrawal behaviours of employees in the public service.Design/methodology/approachThe study adopted a quantitative design, and data were collected through a structured questionnaire from a sample of 252 respondents from the Bayelsa State Civil Service in Nigeria. Data were analysed by applying multivariate regression and structural equation modelling through the use of Stata software version 12 and SmartPLS version 4.FindingsThe results demonstrated that there was a positive relationship between personal income tax regimes and pay dissatisfaction; there was a positive relationship between pay dissatisfaction and work withdrawal behaviour of employee tardiness and absenteeism and pay dissatisfaction mediated the relationships between personal income tax regimes and work withdrawal behaviours of public sector employees.Originality/valueThe study appears to be the first to explore the nexus between personal income tax regimes and pay dissatisfaction and withdrawal behaviours of employee tardiness and absenteeism as well as the mediating role of pay dissatisfaction in public service organisations.

The Belgian Income Tax Regime for (Regulated) Savings Accounts and EU Law: Ten Years of Turmoil

In this article, the author outlines the evolution of the Belgian tax/legal framework with regard to regulated savings accounts, followed by a review of CJEU and domestic case law prior to and following the regime’s extension to foreign deposits. He discusses the administrative position taken in light of more recent case law, including the CJEU decision in VN v. Belgian State (Case C-34/22), concluding that the incompatibility of the regime with EU law in essence lies not in the substantive conditions themselves, but in the requirement that similar conditions must exist in the regulations of other states.

The Future of Special Individual Income Tax Regimes for Inward Expatriates in the European Union

This article aims to elaborate on the possible future development of individual income tax regimes for inward expatriates (inpatriate tax regimes), including the challenges that such regimes pose and possible solutions from the perspective of EU law.

MACROECONOMIC IMPACTS OF PERSONAL INCOME TAX IN THE CONTEXT OF INCLUSIVE DISTRIBUTION OF INCOME AND OVERCOMING INEQUALITYV

The article examines the issues of the generation and distribution of labor income in the Republic of Armenia in the context of the experience and witnessed results of the application of various personal income tax regimes, particularly flat and progressive taxation systems. Based on the analysis of official statistics, main trends of inequality were observed, based on a number of tools used in scientific analysis: the Gini and Palma coefficients, as well as the Theil index. From the results of the study, it was found that the level of inequality in the country has decreased to some extent in the last two decades. At the same time, within the framework of the research, a simulation analysis was carried out and the methods of calculating the Lorenz curve and the Gini coefficient from the wellknown theoretical approaches to inequality assessment were applied in the case of flat and progressive taxation, using the personal income tax database of the RA State Re-venue Committee. Based on this method, as a result of the analysis, it was found that only the progressive taxation system has a certain positive impact in terms of alleviating in-come inequality, while the effect of flat taxation is insignificant.V

Tax regimes, investment subsidies and the green transformation of the maritime industry

Maritime nations aim at establishing an environmentally sustainable shipping industry by 2050. We use insight from real options theory to target tax reforms that may facilitate the industry’s transformation to sustainability. We demonstrate that a zero-cost tax package, which includes subsidies on green investments and a return to a regular income tax regime, can reduce investment thresholds. “Flags of convenience” and tonnage tax systems do not contribute to the sharing of risk between shipowners and governments. From a shipowner’s perspective a higher degree of risk sharing reduces the value of waiting to invest, which may shift an individual investment decision towards a sustainable optimum level.

Оценка экономической эффективности работы нефтедобывающей компании в условиях перехода на режим с налогом на добавленный доход

Additional income tax depends on the financial result, not on the gross production indicators, as is the case of the mineral extraction tax. The authors described the advantages and disadvantages of the new fiscal regime of additional income tax and calculated it for the oil producing company Udmurtneft JSC. They also assessed the operation efficiency for the Arkhangelsk oil field under two fiscal regimes and concluded that the transition could eventually reduce the tax burden for the company. The article introduces a new model for efficient mineral extraction during transition to the additional income tax regime. The model provides economic efficiency through such indicators as taxable profit, net profit, capital investments, net cash flow, and new present value. A stress analysis revealed various factors that affect the tax value, i.e., the dependence of the new present value on the production level under two fiscal regimes, the management system complex, unit costs per 1 well and 1 ton of oil, the production level and specific costs for 1 well and 1 ton of oil, etc. The efficiency calculations and stress tests showed that the proposed model can be used to control the value of various indicators to achieve optimal new present values. Switching to profit-based tax was found feasible in terms of economic indicators: a higher new present value, a lower tax burden, and more profit, even with increasing costs.

Personal Income Tax in Nigerian Fiscal Federalism: Matters Arising

Fiscal federalism is a by-product of federalism. Federalism is a political concept in which power to govern is shared between national and sub-national Governments creating what is often called a federation. Federalism is a political concept in which the power to govern is shared between Federal, States and Local Governments, creating what is often called a federation. Fiscal federalism is characterized by fiscal relations between central and lower levels of Government. The progression in taxation in Nigeria is from personal income tax to taxation on other sources such as petroleum, companies etc. Personal Income Tax Act identifies taxable persons, chargeable incomes, determines assessable income and tax that income. The Act also determines the residence of the tax payer for the purpose of payment and or collection of personal income tax. This paper contains primary and secondary sourced materials, such as laws, statutes, and other resource materials. This paper revealed the aspect of personal income that raises concerns on the ownership of funds collected by State Governments through the State Boards of Internal Revenue under personal income tax regime. Though it is argued by some school of thought that the rules of agency suggest that an agent acting under a delegated authority cannot be heard contesting the subject matter of agency with the principal. However, due to the combined provisions of sections 80(1), 120(1) and 163 of the Constitution which direct that the personal income tax collected by the State Government be paid into the Consolidated Revenue Fund of the State and used for the benefit of the State lay to rest the issue of ownership of the personal income tax collected by the State Government.

The Role of Platforms as Intermediaries under Simplified Tax Regimes: The Example of the Russian Professional Income Tax Regime

This article outlines the features of the Russian Professional Income Tax Regime and the role of the special app, the My Tax App, and intermediaries in respect of the regime. The app is used to automate and simplify the tax reporting process. Such platforms and tailor-made digital solutions, coupled with legislative support, play a significant role in tax compliance. Implementation of the app, however, has raised certain compliance, privacy and data protection concerns, as well as other policy issues that must be addressed.

Benefits and Burdens of Subchapter S in a Check-the-Box World

The Treasury's issuance of the check-the-box regulations (CTB) in late 1996 has intensified debate about whether there should be a single federal income tax regime for all private business firms (PBFs), including passthrough entities, whose equity interests are not publicly traded. This revived concern for parity in tax treatment among the various forms of passthrough entities arose because the CTB regulations generally allow a business entity with two or more owners to be taxed as a partnership for federal income tax purposes, regardless of its organizational structure and corporate-like characteristics under state law. Before the CTB regulations, unincorporated entities were required to maintain at least two noncorporate characteristics in order to avoid the double tax regime of Subchapter C. Revenue Ruling 88-76, which permitted limited liability companies (LLCs) to achieve partnership tax status under the former regulations, inspired state legislatures to jump on the LLC bandwagon by adopting LLC statutes and amending existing LLC statutes to conform to liberalized federal income and transfer tax interpretations. All states now have limited liability company laws, and many have added the limited liability partnership (LLP), which is a hybrid form of organizational structure, between the LLC and the limited partnership (LP), intended primarily for professional service organizations. The primary benefit of the LLP is that it insulates partner-members in professional service organizations from vicarious liability for malpractice errors and omissions.

The Coming(?) Inflation and the Income Tax: Lessons from the Past, Lessons for the Future

The concerns about inflation as a result of the current financial crisis and the U.S. budget deficit challenge the social order, including taxation. Based on the historical U.S. experience and discourse on this issue, the article focuses on the relationships between adjusting the tax system for inflation and the general attitude towards adjustment for inflation in the social order. The article offers a new insight which is very different from the current research. The nominalism/adjustism culture that dominates the social order is placed at the center of the analysis. There is “equilibrium” between the scope of adjustment in the social order and in the tax regime. Advancing adjustment of the tax regime requires that it also be promoted in the general social order. This cultural paradigm plays a significant role in the tax response to inflation, including the scope and character of that adjustment regime. This approach erodes the literature’s conservative approach arguing that classical tax policy consideration like cost-benefit analysis is the most effective factor on the adjustment issue. The article argues that adopting an adjusted tax regime is largely dependent on the existence and extent of a general culture towards the concept of “money”: Is the prevailing culture one of nominalism or adjustism?This paradigm explains the reality in the U.S. in the past with regards to adjustment for inflation. The sophisticated American discourse on adjusting the income tax regime for inflation, which first took place in the late nineteen seventies and early nineteen eighties, was unproductive from the start, and was doomed to failure because the U.S. culture of adjustism was not sufficiently ripe for justifying or permitting a “legitimate” social decision on adjusting the tax regime. The lessons from the past are that advancing adjustment of the tax regime requires promoting adjustment of the general social order. Adjusting the income tax regime without adjusting the general social order would be, culturally, a tough mission and even impossible.

Tax regulation of enterprise R&D expenditures: special aspects and problems of regulation

The subject of the research is a corporate income tax regime of tax accounting of intangible assets and R&D spending. The working hypothesis is that realization of the regulative potential of tax policy in relation to stimulating R&D activity and creation of intangibles assets shall be streamlined and adapted to increase the effectiveness of innovations. Authors suggest that the key tax policy goal of the mechanism is the widening of the volumes of commercialized R&D results and intangibles, lowering the tax risks, and increasing the legal certainty. The aim of this research is formulation of tax policy proposals for subsequent reforming this mechanism of direct taxation of transactions related with R&D.To achieve the aim of the research the following research approach was employed by the authors. As a first step authors present a literature review on the issue. As a second step authors are performing the analysis of current rules related to tax accounting of R&D costs and intangibles in accordance with Tax Code of Russian Federation. As a third step authors delineate the barriers and legal obstacles in the performance of tax incentives for R&D by reviewing the judicial cases and analytical reports on the issue. Finally, authors formulate their tax policy proposals for the subsequent tax reforms in relation to tax accounting of R&D.The results and the scope of the study. Author’s working hypothesis is based on the idea that the effective application of tax policy instruments can contribute to success of the jurisdiction in winning in global tax competition game. This is particularly important in context of digitalization and for attracting investments and parts of activities of multinational enterprises to the territory of the state. Intangible assets and key people which coordinate the processes of the creation of intangibles can be regarded as the crucial value-added factors in the modern economy where technological MNEs are increasingly dominating. Countries compete internationally for these talented people and favorable and certain tax regime can positively impact on MNE decisions to make a profit center in any jurisdiction, while tax uncertainty can negatively impact this decision.Conclusions. One of the key results of this research is that R&D tax incentives in Russia remain rather unpopular instrument in corporate practice. Authors explain this with the existing legal barriers and legal uncertainty. This uncertainty leads to tax risks for taxpayers which impacts their decisions for using the incentives. Review of judicial cases related to tax accounting of R&D costs when calculating corporate income tax base showed that there are many different areas of disputes between taxpayers and tax authorities. It is important to note that some of this uncertainty is already addressed in recent amendments to Article 262 of Tax Code. Authors propose to reduce uncertainty by extending the scope of R&D tax incentives to all types of R&D activity. The goal of the research is therefore can be considered as achieved.

INFLUENCE OF TAX COMPLIANCE COST ON HOSTEL OWNERS’ COMPLIANCE TO RENTAL INCOME TAX IN LAIKIPIA WEST SUB COUNTY, KENYA

<p>The Government of Kenya through the Finance Act 2015 introduced a simplified rental income tax. This is a monthly tax payable by a resident person for rental income earned from use or occupation of residential property. Upon the gazettement of the Income Tax (Residential Rental Income Tax) Regulations, 2016, the Kenya Revenue Authority embarked on an aggressive campaign to enlist landlords into the Monthly Rental Income Tax regime. However, the Economic Survey 2021 showed that the country’s revenue collecting agency KRA was not able to meet revenue targets as set by the National Treasury. Comparison of National Government Budget Estimates with Actual Out – turns for the fiscal years 2017/2018 and 2018/2019 showed that KRA missed the Budgeted Ordinary Revenue targets by Kshs.128.7 Billion and Kshs.90.1 Billion respectively. Property taxes including rental income tax are part of the ordinary revenue collected by the tax authority. The objective of the study was to investigate the influence of tax compliance cost on hostel owners’ compliance to the monthly rental income tax in Laikipia West Sub County. Quantitative data was collected using questionnaires. A census of the entire population of hostels was used to collect the required data. The collected data was analysed using the Statistical Package for Social Sciences (SPSS). The study established that an increase in tax compliance cost discourages compliance behavior since taxpayers tend to evade the costs either by under-declaring their monthly rental incomes or not declaring any income at all. The study recommends that KRA should scale up the tax payer education and awareness programs to ensure that more landlords are trained on how to file their own returns without having to use tax agents who make the process costly leading to non-compliance.</p><p>JEL: H25, H26</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0982/a.php" alt="Hit counter" /></p>

A Study on Indian Public Policy and Proposal for Linking Income Tax Regime to Promote Entrepreneurship Schemes

In recent days, Indian youths have come up with business ideas to encourage the economy of India through entrepreneurship. However, in recent years, they have struggled to find the right approach to success in their business. But the present government has made a road for them to enlighten their vision through the wisdom of the Ministry of Corporate Affairs and the Indian Institute of Corporate Affairs. This paper aims to provide useful suggestions and recommendations for Indian public policy related to the income tax department and government of India to strengthen the opportunity for India's economy and entrepreneurial activity in India. We know that income for the government of India comes from 15% of income tax as per budget 2022.This paper suggests amending the income tax regime to promote the Gross Domestic Product, promote innovation and entrepreneurship, and provide employment opportunities to the citizens of India. This paper reveals 18 suggestions and recommendations through micro and macro models to create an imperial revolution in Indian public welfare. Further, the paper also discusses about the benefits for various participants involved in the public policy affairs. The suggestions and recommendations provided in this paper cannot be tested without the help of the Ministry of Finance and the Government of India. However, this paper reveals the feasibility of the idea and the viability of increasing the GDP, Indian Currency Value, entrepreneurship promotion, unemployment reduction, and benefits to the taxpayers and country in many ways.

Aligning Taxation on Peer-to-Peer-Lending Business with Taxation on Digital Economy in Indonesia

This article seeks to expose the paradox in tax collection on digital services in Indonesia. On the one hand, the Indonesian government has been keen to ensure that multinational enterprises pay their fair share of taxes in the state. This is done by, inter alia, imposing VAT on digital services consumed within the jurisdiction, and the pending imposition of direct tax on electronic transaction. On the other hand, findings of this article show that potential taxation on peer-to-peer lending business seems to be neglected for unclear reasons. As of June 2021, the Indonesian Financial Services Authorities, OJK, reveals that the business has gathered more than 120 registered operators with a three-year-span national and foreign accumulated fund provided by lender amounting to more than IDR 210,000 billion (circa USD 14 billion). This serves as a good reason to ensure that tax obligations are fully complied with. While taxation of this business may rely on the general income tax and VAT regime, the lack of regulation means that a level playing field for digital services corporations generating profit in Indonesia is not ensured. In order to optimize the potential revenue from the business, a rigorous yet simple tax regime must be in place.

The Individual Income Tax Regime of China: Evolution and Debates

The author, in this article, describes the evolution of China’s Individual Income Tax Regime and the major changes made by the Seventh Amendment in 2018, and then analyses a number of issues with regard to the current regime.

Income Tax Regime- Old Vs New

The Government of India has announced new tax slab in Union Budget 2020-21. This new tax slab is also called as Optional tax regime because Government has not abolished old tax regime. The tax payer has option to choose the tax regime i.e. either Old or New which is better for them. The new tax regime has lower tax slab as compared to old tax structure. The taxpayer has given an option to either choose new tax structure with lower tax slab or the old tax one with tax benefit but higher tax slabs. The old tax regime enable taxpayer to avail existing tax exemption such as Leave Travelling Allowance, House Rent Allowance & deductions available under Income Tax Act, 1961. While those who are opting new tax regime will not have to avail advantages of existing exemptions & deductions that are available under old tax regime. The old tax regime has higher tax rate and three tax slab, whereas new tax regime has lower tax rate & six tax slabs. There is similarity in tax rate in case of individual below 60 years of age in both tax regime as it is exempted up to 2.5 lakh. In addition to this as per Section 87A (Introduced in Finance Act, 2003) Individual who is resident of India for Income Tax purpose, is entitled to claim tax rebate up to Rs.12,500 against tax liability if his/her Income does not exceed Rs.5,00,000 for old as well as new tax regime. Keywords: Income Tax, Tax Slab, Exemptions, Deductions, Old Vs New Tax Regime.

An Analysis of Philippine Income Tax Reforms

This paper examines possible reforms in the income tax regime of the Philippines, highlighting some of the proposals recently discussed in the Philippine legislature. Because it will focus only on income taxes, it will stop short of assessing what might be considered an optimal tax structure. The analysis herein will illustrate some of the policy issues germane to tax progressivity and its contribution to inclusive growth and development in the Philippines.

A Critical Evaluation of the Special Income Tax Regime for the Banking Sector of Pakistan

Based on its contribution to overall federal tax collection, the banking sector in Pakistan is the second largest after the oil and gas sector. In this article, the author summarizes and critically evaluates the provisions of income tax law governing the taxation of the income, profits and gains of banking companies.

Reform and amendment of Russian petroleum fiscal term: trends and implication to asset acquisition

This article analyzes reform and amendment of petroleum tax policy in Russia to investigate instability of tax regime which is one of the main concerns for decision making in asset acquisition. Historical and recent amendments of upstream fiscal terms in Russia are reviewed and studied in an attempt to understand the trends of reform. Tax burden of four different cases is modeled with the change of tax policy to analyze the effect of tax incentives. The recent “tax maneuver” of transferring export duty to Mineral Extraction Tax (MET) is studied in detail to analyze effects to upstream, refinery, and customers. Net present values of three field cases under previous tax regime and new Added Income Tax (AIT) regime are comparatively studied with cashflow modeling. The article concludes that recent “tax maneuver” has indirect influence on upstream sector but may lead to upward pressure on retail. New AIT regime introduces a universal taxation system and requires less government intervention, which may reduce aboveground risk of unstable fiscal regime and boost international investment in Russia. Also, key suggestions are summarized for international investors who are interested in oil and gas asset in Russia.