Investment Tax Research Articles

Tax Neutrality Treatment of Investment Funds in the European Union

This article examines the legal consequences and assesses the economic impact of the differing tax treatment of investment funds in Portugal, Germany and Luxembourg before and after the Allianzgi-Fonds landmark decision, by the CJEU. Before the Allianzgi-Fonds decision the Portuguese investment taxation discriminated against foreign investments by levying a withholding tax on foreign compared to domestic investments. The Allianzgi-Fonds decision prohibited this discriminatory treatment. Therefore, our article examines whether the Portuguese CIT exemption extended to non-resident UCITS will lead to tax neutrality treatment of investment funds in the EU. Overall, we confirm that the abolishment of the discriminatory withholding tax can considerably reduce the effective tax levels for cross-border investments. Moreover, the abolishment also diminishes the domestic investment bias. Nonetheless, the results do not confirm the achievement of neutrality.

Pentingnya Struktur Modal Untuk Meningkatkan Kinerja Keuangan Perusahaan Sub-Sektor Teknologi

This research aims to determine the impact of investment decision, structure capital, and tax aggressiveness on financial performance.. This type of research is quantitative research that uses secondary data in 2018-2022 periods. The sample used was 44 technology subsector companies listed on the Indonesia Stock Exchange (BEI). This research uses purposive sampling method with certain criteria. There were 63 data obtained which were used in this research. The hypotheses in this research were analysis uses multiple linear regression. The results of this research show that 1) investment decisions have no significant effect on the company's financial performance, 2) capital structure has a positive significant effect on the company's financial performance, 3) tax aggressiveness have no significant effect on the company's financial performance

At the intersection of investment visas and tax residency: global challenges

At the intersection of investment visas and tax residency: global challenges

Tax regulation of innovation activities

Under the current Western economic sanctions, one of the most important tasks facing the state is to increase the level of innovation in the national economy. Investment and innovation activity has a direct impact on the volume of production potential and, as a consequence, on the formation of budget revenues. The subject of the study is the use of methods of tax regulation of innovation in the regions. The purpose of the article is tax incentives for investment activities by the methods provided by the Tax Code of the Russian Federation (hereinafter referred to as RF, Russia) in federal districts using the example of value added tax, corporate property tax, and corporate profit tax. The following methods аre used in the study: analysis and synthesis, generalisation, grouping, the tabular one. The information base for the research are the Tax Code of the RF, reports of the Federal Tax Service of Russia on these taxes. The work examines foreign and domestic experience in applying methods and benefits to stimulate innovative business activity. The study has found that in the regions, at an extremely low level, they take advantage of the opportunities provided by the Tax Code of the RF in pursuing innovation policy, in particular, in conducting research and development, using the methods of accelerated depreciation of fixed assets, and investment tax deductions. The analytical data and conclusions obtained during the study can be used in the practical activities of regions and economic entities.

A Lost Opportunity? Environmental Investment Tax Incentive and Energy Efficient Technologies

AbstractThis paper examines the impact of the Spanish Environmental Investment (EI) tax credit on adoption of green technologies by employing data from 2567 industrial firms for 6 years. It makes use of the sudden re-introduction of the tax incentive in March 2011, that aimed at favouring energy efficient over solely pollution abating technologies. I exploit this unexpected change and perform a difference-in-differences analysis to study its effect on green investments and as an extention on green employment outcomes. The policy change, aimed at switching financing to energy efficient technologies, is assessed as semi-effective. Admittedly, it decreased investment in end-of-pipe technologies, but the investment in superior cleaner production technologies increased only for the small firms (below 50 employees), which are especially vulnerable to the capital market failure. Unfortunately, the policy change had also a few unexpected indirect effects, firms in response to the tax incentive regime modification reduced the number of their green employees and their associated salaries. In stark contrast to the decision of the Spanish government on this EI tax credit, the results of this analysis seem to be quite encouraging for the continued use of this green fiscal policy and show that the modifications in the precision of the existing fiscal policies can be successful.

Faktor yang Mempengaruhi Nilai Perusahaan dengan Moderasi Ukuran Perusahaan pada Sektor Healthcare di Bursa Efek Indonesia

Company value is used to assess the importance of a company from the point of view of various parties, such as investors who are concerned with the valuation of a company through its share price. The high value of the company shows that the company is in a prosperous condition. The purpose of this research is to prove the overall effect of investment opportunity set, capital structure, and tax planning on company value with company size as a moderating variable in healthcare sector companies recorded on the Indonesia Stock Exchange for 2019-2023. The sampling technique in this research uses a purposive sampling technique and uses the Moderated Regression Analysis (MRA) method. The test results show that investment opportunity sets and tax planning have a significant positive contribution to firm value, capital structure has no contribution to firm value. Company size cannot moderate investment opportunity set and capital structure on company value, company size can moderate tax planning to increase company value in healthcare sector companies on the Indonesia Stock Exchange 2019-2023.

A closed-loop supply chain inventory model with stochastic demand, exchange rate, green investment, and carbon tax

In this paper, a mathematical inventory model for a closed-loop supply chain consisting of a single manufacturer and a single retailer is investigated under a stochastic environment and imperfect production. The manufacturer adopts a remanufacturing policy to recover returned products from the market. The model takes into account exchange rate disparities because the supply chain’s participants are in separate countries. The model also considers carbon emissions, which are expected to be produced from storage, transportation, and production. A carbon policy, namely carbon tax, is implemented to manage the overall emissions resulting from the supply chain. To cope with carbon restrictions, the manufacturer has an opportunity to invest in green technologies. The objective of the study is to find optimal shipment quantity, number of deliveries, safety factor, and green investment such that the joint total cost is minimized. An iterative procedure is suggested to solve the proposed problem, and a numerical example is presented for model validation. The findings imply that variations in the production rate and carbon tax have a significant influence on the model’s performance. Aside from that, the results reveal that uncertainty in the exchange rate and production flaws are important factors that must be considered by managers in making inventory decisions, especially those related to the number of deliveries, frequency of deliveries, and the amount of money invested in green technology. Finally, a sensitivity analysis is provided to explain the behavior of the model.

Investment and depreciation tax shield under spatial competition: The case of the Greek hotel sector

Investment and depreciation tax shield under spatial competition: The case of the Greek hotel sector

Investors Preferences and Awareness towards Various Investment Avenues in Delhi-The Capital City of India

This research explores into investors’ investment preferences and awareness levels in Delhi- the capital city of India. Exploring a dynamic marketplace brimmed with traditional and contemporary avenues, this study sheds light on the following: This study identifies the most popular investment options among Delhiites and considering factors such as risk appetite and financial literacy and income levels. It analyzes whether traditional instrument’s such as bank deposits & real estate prevail or whether modern instrument’s such as mutual funds and the stock market are gaining popularity. This study investigates the level of awareness among different investors segments across a diverse spectrum of investment possibilities. It examines how factors such as age, education and occupation affect investors' knowledge of different options and highlights potential shortcomings and opportunities for financial literacy initiatives. This study examines the key factors influencing investment decisions in Delhi. It goes beyond risk return tradeoffs and analyze how the factors such as investment horizon and tax implications and emotional comfort levels shape investors choices. This research proposes targeted solutions by understanding the unique preferences and knowledge gaps in Dеlhi's investment landscape. It recommends strategies to bridge information gaps and promote responsible investment practices and promote a prosperous and inclusive financial ecosystem in the city. The aim of this research is to contribute to a more informed and empowered investment environment and ultimately boosting financial well- being and economic growth within the city by illuminating the motivations and behaviors of Dеlhi's investors. Keywords: Delhi investment preferences, Traditional vs. modern avenues, Investor awareness disparities, Decision- making drivers, Risk tolerance.

Predicting the economic feasibility of solar-based net-zero emission buildings (NZEBs) in the United States non-residential sector

Buildings have significantly contributed to high energy demand (30.3%) and GHG emissions (26.1%) worldwide. Consequently, many developed countries have set carbon-neutral targets for 2050, mandating that all new constructions thereafter be designed as net-zero emission buildings (NZEBs). To achieve this goal, one of the most practical sources of renewable energy, solar power, is employed in this study to estimate the economic feasibility of implementing NZEBs in the non-residential sector of the United States. While past studies have typically estimated the economic payback period of solar power technology by assuming fixed values for “PV energy conversion rates (%)” and “investment costs ($USD)”, this paper carefully investigated the economic feasibility of “solar-based NZEBs” by precisely tracking these dynamic future changes in PV panels. These techno-economic variables were carefully predicted using a statistical technique known as the five-parameter logistic (5 PL) function. The results show that Site 4 is the only solar region suitable for implementing “PV-integrated NZEBs”, reaching a payback period of 8.44 years in 2040 (Scenario 1). Furthermore, with small technological improvements in PV energy efficiency (%), buildings located in Site 3 and Site 4 can meet the net-zero emission target with payback periods of less than 10 years in 2034 (Scenario 2). Finally, starting in 2044, the “PV-integrated system” will have a payback period of approximately 7 years in most study locations, even without federal support for the solar investment tax credit (SITC). Accordingly, federal support for solar power generation will be more effective if the SITC rate is gradually reduced by 2.5% annually starting in 2033. In conclusion, this paper suggests the economic feasibility of implementing solar-based NZEBs in the United States non-residential sector by considering the synergetic effect of technological improvement and cost reduction in PV-integrated systems.

Revisiting the Policy Implications of Medical Tourism in the Post-COVID-19 Pandemic From a Malaysian Perspective: A Qualitative Study.

Background Malaysia has been one of the most prominent destination countries for medical tourism. The industry received significant government support to create a conducive environment for its growth, such as the provision of an investment tax allowance for the facilities participating in medical tourism and the establishment of the Malaysia Healthcare Travel Council (MHTC) to coordinate collaboration between various industry stakeholders to promote medical tourism activities at the international level and facilitate inbound medical tourists. The establishment of the MHTC facilitates collaboration between various industry stakeholders. In addition to facilitating medical tourism activities, MHTC is also involved in analysing relevant data, including but not limited to the socio-demography of medical tourists, the trend of their healthcare service utilisation, revenue generated, and market intelligence to promote the industry's growth. The council serves as a medium to facilitate the collaboration of stakeholders such as the hospitals participating in medical tourism, the Association of Private Hospitals Malaysia, the Malaysian Society for Quality in Health, and various government agencies, including the Ministry of Health and the Department of Immigration, Malaysia. We explore the policy-related implications of medical tourism and its relationship with the Malaysian national healthcare system. Methodology We revisited Pocock and Phua's conceptual framework of policy implications for medical tourism to explore its relevance after more than a decade of intensive government support and the aftermath of the COVID-19 pandemic. We employed a qualitative case study design using semi-structured, in-depth interviews with stakeholders from the Ministry of Health Malaysia, the private health sector, professional bodies, academics, and health-related civil society organisations. Results Our study found that many issues identified in the original framework remain relevant after over a decade. However, we also identified additional implications, such as the role of insurance portability in encouraging the growth of international hospital accreditation and the issue of equitable access to healthcare within the context of the current Malaysian healthcare system in the aftermath of COVID-19. Conclusion Due to its vulnerability, there is a need to develop a strategic collaboration that includes incorporating medical tourism activities into a broader framework, such as promoting aged care within the retirement destinations package for expatriates, which could ensure its sustainability instead of relying solely on medical tourism activities. In the meantime, policy implications arising from the industry remain relevant and should be addressed through a comprehensive structural reform of the national healthcare system involving stakeholders from the public and private health sectors.

Prospects for the use of preferential taxation of individuals to achieve environmental sustainability in Russia

Within the framework of this article, the issue of achieving sustainable development goals is problematized, special attention is paid to the study of the possibilities of preferential taxation to ensure environmentally responsible behavior of individuals, as a significant facet of a proactive approach to solving environmental problems. The importance of the participation of the state and society in achieving the goal through the provision of tax preferences is emphasized. To achieve this goal, the following tasks were solved: the place of environmental responsibility in the system of general responsibility of individuals was studied; the role and methods of the state in the system of encouraging environmentally responsible behavior and consumption of the population are outlined; An assessment is made of the prospects for the use of environmental preferences in the taxation system for individuals. The study revealed that at the same time, environmental tax instruments are practically not used in Russia at the moment. Directions for the development of environmental tax preferences are proposed through the dissemination of the practice of applying zero tax rates for transport taxes, the introduction of environmental tax deductions, and the adjustment of investment tax deductions for taxes for individuals.

Techno-economic-environmental optimization of on-grid hybrid renewable energy-electric vehicle charging stations in BTS infrastructure

Hybrid renewable energy systems with electric vehicle charging stations can provide reliable and environmentally friendly power output for telecom Base Transceiver Stations (BTS). This paper provides an optimized BTS telecom deployment method. The proposed framework uses actual load profiles to conduct a techno-economic assessment of 26 independent sites in North, South, and Central regions to reduce NPC, operational costs, LCOE, and diesel generator running hours. To complete this study’s financial model, these 26 BTS sites are connected to the grid for net metering and environmentally friendly electric vehicle (EV) charging stations, and incentives (bonus depreciation and investment tax credit) are added. Finally, numerous uncertain elements are sensitively analyzed, and a carbon emission reduction environmental evaluation is done. When connected to a grid for net metering, freestanding hybrid systems (diesel generator-photovoltaic-wind-battery) have a significantly lower LCOE. Standalone hybrid systems have LCOEs between 0.1096 and 0.2325 $/kWh. On-grid hybrid systems have an average LCOE of 0.004065 to 0.03559 $/kWh. After adding electric vehicle charging stations and incentives, the average LCOE drops further. Optimization and comparative studies reveal that the best grid expansion hybrid charging station is cheaper, greener, and more sustainable than the stand-alone hybrid system. The Sustainable Development Goals (SDGs) and governments and corporate investors can utilize the suggested studies to make decisions and optimize policies.

Tax Incentives for Economic Growth in the Russian Far East: Broad vs. Targeted Stimuli

The purpose of this study is to justify the choice of tax incentive policy instruments aimed at the economic development of the Russian Far East, which is facing acute demographic and environmental problems. To model the dynamics of the region’s real economic system, this study employed a mathematical model based on actual data from 2010 to 2021, covering economic, technological, and socio-ecological aspects. Using the versatile AnyLogic 8.0 platform for agent-based and system dynamics modeling, experiments on alternative tax incentive policy options involving both broad tax incentives and targeted economic development measures were conducted. Specifically, a 50% investment tax deduction for residents in special economic zones in the Russian Far East was implemented. The experimental results show that, despite comparable population dynamics, targeted stimulation of growth poles through public-private partnership programs outperforms broad tax incentives for economic entities in the Russian Far East. This is evident in higher economic growth rates in the region, particularly during the experimental period, except for 2040–2050, where adverse demographic trends constrain growth in both scenarios. The theoretical significance of the application of this method has shown that it allows us to obtain new significant results in the subject area of research due to the consideration of the complex interaction of factors of influence both at the micro- and macro-level, primarily behavioral factors that are fundamentally important for understanding the action of taxes. The practical implications of this study lie in defining the parameters of tax policy to target and stimulate growth poles in regions serving as hubs for generating and disseminating new technologies. The planned perspective is to encourage population growth and ensure sustained economic development in Russia’s Far East. It is advisable to explore comprehensive tax and budgetary regulations that simultaneously address economic, socio-demographic, and environmental issues in the region. Doi: 10.28991/ESJ-2024-08-03-021 Full Text: PDF

Development of proactive mode of providing tax deductions for personal income tax

The paper studies discussion issues of the simplified procedure for obtaining tax deductions for personal income tax (hereinafter referred to as PIT). The objectives of the study are the following: to review the changes in tax legislation from January 1, 2024 in the field of proactive mode of granting tax deductions for PIT, to justify the increasing role of this interaction between individuals and tax authorities, to identify current problems and to search for ways of solving them. The authors analysed the practice of application of the simplified procedure for obtaining property and investment tax deductions; statistical data of the Federal Tax Service of Russia on the provision of tax deductions in a simplified manner (1-DDK statistical form “On the declaration of personal income”). The analysis of key changes in the provision of deductions entering into force on January 1, 20124 was also conducted. The main problems that individuals may have when receiving deductions or that tax authorities may face in the course of tax control are highlighted, and possible ways to solve them are identified. The authors concluded, firstly, that it is necessary to form prefilled applications not only while receiving tax deductions, but also when paying PIT, for example, when a person sells real estate, cars. Secondly, it is required to enshrine in tax legislation the order of priority of providing tax deductions if a taxpayer has the right for several types of them. The obtained results can be used in developing solutions to taxation of personal income and provision of tax deductions, in legislative drafting on improvement of provisions of the state tax policy.

Effects of the U.S. inflation reduction act on SMR economics

The U.S. Inflation Reduction Act (IRA) of 2022 provides a wide array of tax credits and other incentives for low-carbon energy. The technology-neutral clean generation production tax credit (PTC) (Section 45Y of the U.S. Internal Revenue Code) and the technology-neutral investment tax credit (ITC) (Section 48E) lower the net cost of new electricity generation projects with zero or negative greenhouse gas emission rates. We evaluate the impact of the IRA legislation—specifically the PTC and ITC—on the cost-competitiveness of small modular reactors (SMRs). We use the Argonne Low-carbon Energy Analysis Framework (A-LEAF) model to calculate the capacity factor of an SMR with a range of hypothetical variable operating and maintenance (O&M) costs in the Electric Reliability Council of Texas (ERCOT) electricity market. We selected ERCOT for market modeling because of its competitive structure, available data, and extensive use in prior literature. We use a discounted cash flow model to calculate the SMR’s net present value based on the market prices and capacity factors from A-LEAF, hypothetical ranges of capital and variable O&M costs, and other input parameters, with or without the IRA tax credits. We determine the SMR owner’s optimal choice of PTC or ITC for the hypothetical ranges of capital and variable O&M costs. We also evaluate potential shifts in the SMR owner’s optimal choice of PTC or ITC based on historical patterns of nuclear capital cost overruns in the United States. We also assess the sensitivity of our results to longer PTC period and electricity prices from the New England market, which tend to be higher than electricity prices in ERCOT. We find that even with the IRA tax credits, only SMRs with low capital and variable O&M costs would be economically feasible in the low-price ERCOT market scenario modeled. A longer PTC period and higher-price market such as New England, however, would significantly expand the economic feasibility of SMRs in the United States.

Can solar energy become polarized? Understanding the role of expressive and negative partisanship in support for solar tax credits

The Inflation Reduction Act (IRA) of 2022 is perhaps the most ambitious federal legislation aimed at decarbonizing the energy system. The IRA expanded investment tax credits (ITCs) for households that install rooftop solar, providing an important catalyst to encourage households to adopt this innovation. Although the IRA is promising, the transition to renewables has been slow and marred by partisan polarization and legislative gridlock. We suggest that renewable energy policies, such as ITCs, could become polarized. Our results imply that partisan polarization around solar ITCs is currently modest, but such policies could become polarized in the future. Expressive partisans—those for whom partisanship is a salient social identity—and negative partisans differ from other partisans. Opponents of renewable energy could potentially leverage negative and expressive partisanship to create opposition. However, this outcome is not inevitable. We suggest that policymakers and renewable energy advocates should develop strategies to avoid partisan polarization.

The impact of Chinese foreign direct investment and environmental tax revenues on air degradation in Europe: a spatial regression approach, 2000-2020.

This study analyzes air pollution through the effects of China's FDI in 27 European countries over a 20-year period, with a focus on the impact of environmental tax revenues (ETRs) and the environmental context in China. The relationship is estimated through spatial regressions that account for the presence of air pollutants in neighboring countries. The findings suggest that China's FDI in Europe does not contribute to air pollution but rather has a positive impact. The presence of environmental charges filters out non-polluting investments, which has a non-linear relationship with PM2.5 pollution rates. The study also concludes that air pollution is closely linked to the global environmental context, highlighting the positive effects of international agreements in the fight against climate change. Specifically, the study finds a link between China's efforts to address its polluting activities and their impact on European air quality.

The Compatibility of the Spanish Windfall Levy on Credit Institutions with EU Law and International Economic Law (Investment Law and Tax Treaties)1

Abstract This contribution serves to provide a fully-fledged analysis of the compatibility of the Spanish windfall tax on credit institutions with EU law (EU monetary and banking policy, EU Fundamental Freedoms, and state aid) and international law (investment law and double tax treaties). Our analysis reveals that the design of the Spanish tax captures windfall profits that are large and easy to detect due to inflation and high interest rates. Although the tax is compatible with EU law, it compromises the area of bilateral investment treaties and bilateral tax treaties.

WEALTH WHISPERERS: A Financial LLM

In an era of continually evolving financial markets, the demand for sophisticated financial advisory models tailored to the unique landscape of the Indian market is more prominent than ever before. This Paper offers a comprehensive model designed to address the nuances and complexities of the Indian financial ecosystem, empowering financial advisors with a culturally relevant and powerful toolset to effectively serve their clients. The Financial Advisory LLM Model, customized specifically for the Indian market, seamlessly integrates Legal, Financial, and Management (LLM) expertise into a unified and cohesive platform. Leveraging cutting-edge technologies such as artificial intelligence and machine learning, this model significantly enhances the advisory process, making it more efficient and precise. This project report delves into the extensive range of solutions provided by the Financial Advisory LLM Model, specifically tailored to address various financial challenges within the Indian context. These solutions encompass areas such as investment management, wealth preservation, and tax optimization. By incorporating these elements into the model, the report aims to empower financial advisors to meet the diverse needs of their clients effectively and efficiently. Key Words: Financial Advisory LLM Model, Indian financial ecosystem, Artificial intelligence and machine learning, Cutting-edge technologies, Financial technology (FinTech), Investment management