Reduction In Tax Rate Research Articles

Use of tax benefits to optimize taxation

Based on the analysis of current legislation, available scientific, journalistic and methodological sources, the article reveals the specifics of using tax benefits with a view to optimizing taxation. It is established that among the legal methods of tax optimization, the key ones are as follows: selection of the most optimal taxation system for doing business, which should be carefully analyzed taking into account the specifics of the business entity’s activities, its scale and structure; building a business model with integration of individual entrepreneurs under the simplified taxation system into the organizational process of a business entity - a legal entity; use of tax benefits provided for in the legislation by a business entity. The benefits may include both full exemption from certain taxes and reduction of tax rates, which contributes to a significant reduction in the tax burden of the business entity. Among the most effective schemes of tax optimization through privileges are the following: 1. Employment of persons with disabilities in order to use benefits. The scheme involves reducing the tax burden and obtaining financial benefits from the employment of persons with disabilities. It can be implemented in two ways, simple and complex. At the same time, the essence of both options is that the taxpayer receives a number of benefits provided by tax and labor legislation aimed at stimulating the employment of people with disabilities and at the same time reducing the tax burden on employers; 2. Use of the simplified taxation system. There are two ways to take advantage of the simplified taxation system to optimize taxation: simple and complex. In the simple version, an existing business entity, trying to optimize taxation, decides to switch to the simplified taxation system. In essence, the transition of a business entity to the simplified taxation system is itself a tax optimization, as it gives micro and small businesses the opportunity to use more lenient tax conditions compared to the general taxation system. As for the complicated option, it is much more attractive in terms of optimization results, but at the same time it is associated, in some cases, with certain risks. The essence of the scheme is to take advantage of the system by “splitting the business” into several individual entrepreneurs - single tax payers of the second group. However, the central control over the business is retained in the hands of a single managing entity - a legal entity, most often a legal entity - a single tax payer of the third group.

The Effect of Changes in Tax Laws on Stock Liquidity: Evidence From the Tax Cuts and Jobs Act

ABSTRACTThis paper investigates the effect of the Tax Cuts and Jobs Act of 2017 (TCJA) on stock liquidity. The TCJA brought significant changes, including a reduction in corporate tax rates and provisions incentivizing the repatriation of foreign earnings. We find a negative association between TCJA‐related events and the liquidity of U.S. stocks, persisting even up to 60 days following legislative announcements. However, despite the negative impact on liquidity, there is evidence of improved price efficiency following the TCJA enactment, driven by increased informed trading. Additionally, our analysis extends to non‐U.S. stocks traded in U.S. markets and indicates similar relations.

The Influence of Tax Understanding, Reduction of Final PPH Tax Rates, and Tax Sanctions on the Compliance of Micro, Small, and Medium Enterprises (MSMEs) Taxpayers (Case Study on Batik MSMEs in Jambi City)

This research aims to determine the effect of understanding taxation, reducing the final PPH tax rate and tax sanctions on taxpayer compliance. This research was conducted on batik MSME in Jambi City. The number of samples used in this research was 104 (one hundred and four) MSME actors with the sampling method being a saturated sample. The data analysis technique used in this research is SPSS 27. The results of this research show that understanding taxation is positive and significant on taxpayer compliance, reducing the final PPH tax rate has a positive and significant effect on taxpayer compliance. Meanwhile, tax sanctions have a negative and insignificant effect on taxpayer compliance

DOES A REDUCTION IN TAX RATES INFLUENCE TAX AGGRESSIVENESS? AN ANALYSIS WITH ADDITIONAL FACTORS

This study investigates the effect of reduction tax rates in Indonesia and other factors that may impact tax aggressiveness. This study employs multiple linear regression analysis, using E-Views 12 as analytical software. A sample of fourteen real estate and property companies listed on the Indonesia Stock Exchange (IDX) for 2017 to 2023 was identified through purposive sampling. This study relies on secondary data derived from the company's financial statements. The results showed that the reduction in tax rates and the presence of independent commissioners did not significantly affect tax aggressiveness. In contrast, institutional ownership and profitability factors positively correlate with tax aggressiveness, while leverage shows a negative correlation. It is expected that the results of this study will contribute to the development of taxation policies for companies in Indonesia, aiming to reduce aggressive taxation practices and assist companies in their tax-related decision-making framework.

Do political connections pay? Evidence of corporate payroll tax planning in Chinese firms

ABSTRACT Drawing on a dataset of listed Chinese firms, our study reveals a notable reduction in effective payroll tax rates for politically connected firms. Using China’s anti-corruption campaign as an exogenous shock, our difference-in-differences (DID) analysis indicates a significant increase in the effective payroll tax rates of politically connected firms after the campaign. Well-developed legal institutions, social security fund holdings, and high-quality external audits mitigate the effect of political connections on a firm’s effective payroll tax rates. These results are instrumental in regulating firms’ payroll tax payments from an informal institutional perspective.

Effectiveness of tax incentives in optimizing corporate income tax revenue: Case study public listed company tax office

Tax revenue is a key component of the Indonesian State Budget (APBN) and plays a strategic role in national development. This study aims to analyze the impact of the implementation of the income tax rate reduction policy and tax incentives based on Law Number 7 of 2021 on Harmonization of Tax Regulations (UU HPP) on corporate income tax revenue at Public Listed Company Tax Office. The research methodology used is qualitative descriptive, with primary data obtained through interviews with tax officials and tax consultants, and secondary data from tax revenue documentation and related literature. The findings show that the reduction in corporate income tax rates and the provision of tax incentives for publicly listed companies significantly impact the optimization of tax revenue at the Public Listed Company Tax Office. The largest contribution to corporate income tax revenue comes from companies listed on the Indonesia Stock Exchange (IDX), with a dominant contribution from companies conducting Initial Public Offerings (IPOs). The study also identifies several factors affecting the optimization of corporate income tax revenue, including tax awareness and corporate tax morale. These findings provide important insights into how tax policies can be optimized to improve taxpayer compliance and tax revenue, as well as their contribution to national economic growth.

The effect of taxation on Moroccan FDI in African countries: an empirical analysis using panel data

ABSTRACT The paper aims to analyse the impact of taxation policies in African countries on Moroccan foreign direct investment (FDI) using panel data from 29 African countries spanning the period 2005–2021, employing the Estimated Generalized Least Squares estimation method. The findings suggest that high total tax, profit tax, and other tax rates deter Moroccan multinational enterprises (MNEs) from investing in African countries. Conversely, fiscal incentives and reduced tax rates positively influence Moroccan FDI in African countries. Additionally, the results indicate that a high score for tax payment and tax rates positively influences Moroccan FDI in African countries, implying that high-quality taxation policies encourage Moroccan MNEs to invest in African economies. Furthermore, the study finds that the GDP of African economies positively moderates the effect of taxation on Moroccan FDI behaviour. This suggests that the larger the market size of a country, the less severe the negative impact of taxation on FDI.

Принцип «самоокупаемости» налоговых льгот и его роль в обеспечении экономической безопасности субъектов Российской Федерации

The paper examined in detail the issue of calculating the cumulative budgetary effect of stimulating tax expenditures. The presented algorithm was tested on the calculation of the assessment of the tax expense of the Nizhny Novgorod region for payers of the simplified taxation system as part of the provision of a tax benefit in the form of a reduced tax rate to 0 %. As a result of the study, the peculiarities of calculating the indicator and its impact on the economic security of the region were revealed, using a formula from the approved evaluation rules to obtain a complete and reliable result. Using the proposed algorithm, it is possible to assess the cumulative budgetary effect of the stimulating tax expense and form a decision on the introduction, prolongation, adjustment or cancellation of the tax expense.

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

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

ACCOUNTING IN UKRAINE: TODAY'S CHALLENGES

The ongoing military conflict in Ukraine has inflicted significant damage on the nation’s infrastructure and economy, disrupting traditional business operations and necessitating a reevaluation of accounting standards and practices. This disruption highlights the critical role of accounting in assessing damage, supporting recovery efforts, and adapting to a rapidly changing economic environment. As such, understanding the modifications and challenges in accounting during this period is essential for ensuring business continuity and aiding national recovery. This article aims to analyze the organizational, legislative, and regulatory changes in accounting and financial reporting practices in Ukraine during the conflict. It seeks to evaluate how these adaptations address the specific needs of businesses operating under crisis conditions and contribute to sustaining economic activity during periods of instability. The study employs a combination of general scientific methods including analysis and synthesis, induction and deduction, and theoretical generalization. A comprehensive review of recent legislative acts and modifications to the Ukrainian accounting framework provides a detailed understanding of the current accounting landscape and its evolution in response to the conflict. The findings reveal significant legislative adaptations that have simplified tax systems, reduced tax rates, and introduced exemptions aimed at alleviating the burden on businesses. Additionally, the establishment of emergency-specific accounts for recording the financial impacts of the conflict has enhanced the clarity and accuracy of financial reporting. These changes have not only facilitated the immediate survival of businesses but also laid the groundwork for future economic stability and recovery. Looking forward, continuous adjustments and updates to accounting standards will be crucial as the situation in Ukraine evolves. Future research should focus on the long-term effectiveness of these adaptations and explore further modifications to support the resilience and recovery of the Ukrainian economy. The development of robust accounting practices remains a cornerstone of economic recovery and sustainability, serving as both a record of the impacts of the conflict and a foundation for rebuilding efforts. By documenting and analyzing these changes, this article contributes valuable insights into the role of accounting in crisis management and recovery, providing a resource for academics, practitioners, and policymakers involved in navigating and overcoming the challenges posed by the conflict in Ukraine.

Fiscal Policy to Encourage Investment in the Marine Logistics Sector

The marine logistics sector plays a crucial role in a country's economic growth, particularly for archipelagic nations like Indonesia. However, investment levels in this sector remain low, which can hinder potential economic growth. This research aims to analyze various fiscal policies that can encourage investment in the marine logistics sector. The methods used in this research are qualitative and quantitative descriptive analysis. The results indicate that fiscal policies such as tax incentives, subsidies, and government funds allocated for maritime infrastructure development can increase the attractiveness of investment in this sector. Tax incentives, such as reductions in corporate income tax rates, exemptions or reductions in import taxes for equipment, and tax allowance facilities, can be effective instruments to attract investment. Subsidies, such as capital assistance, low-interest loans, and operational cost compensation, can also help reduce investment risks and encourage investor participation. Additionally, adequate allocation of government funds for the development of maritime infrastructure, such as ports, docks, and other logistics facilities, is crucial for enhancing the sector's efficiency and competitiveness. However, fiscal policies alone are not enough. Improved regulations and better law enforcement are also necessary to create a conducive investment climate in the marine logistics sector.

BRANCH PROFIT OF UPSTREAM OIL AND GAS BASED ON TAX TREATY AND PRODUCTION SHARING CONTRACT IN INDONESIA

Tax treatment for a production sharing contract (PSC) is possibly different from general tax rules when calculating the amount of annual cost to be allocated by upstream oil and gas business to project their profit. On the other hand, the prevailing tax law applied in a particular country could either be made based on domestic tax law and a tax treaty depends on the tax subject. This article is intended to discuss tax arrangements sourced by a PSC during cost recovery regime and tax treaties in Indonesia. This study also discusses the cases brought before the Supreme Court due to the interplay of a PSC and a tax treaty during the years of 2015-2021. The research uses normative legal research with data collected through documentation studies. The contractors demanded a reduced tax rate on branch profit derived from a tax treaty as a general rule considering that they are the persons covered by the treaty. However, they must also respect production sharing as agreed in a PSC that existed before the conclusion of the tax treaty. For the future, it needs to adopt the stabilization clause to deal with the issue.

The effect of enterprise quality management on innovation incentives in enterprises —— based on the reform of China's value-added tax system

This article will analyze the incentive effect of the value-added tax rate reduction policy on enterprise innovation from the perspective of enterprise quality management. The research results indicate that: (1) the reduction of value-added tax rate has an incentive effect on the innovation activities of enterprises; (2) There is a positive moderating effect of enterprise quality management on the reduction of value-added tax rate and the innovation and research and development activities of enterprises; (3) The reduction of value-added tax rate has a more significant incentive effect on innovation in the eastern region of China, state-owned enterprises, and relatively larger enterprises.

The employment effects of corporate income tax and the bargaining power of labor unions

This study analyzes how the relationship between corporate income tax and employment varies according to the bargaining power of labor unions. To this end, we use a dynamic general equilibrium model to examine corporate income tax and the bargaining power of labor unions based on a span-of-control model. Previous studies on the relationship between corporate income tax and employment are inconclusive and do not examine the role of the bargaining power of labor unions in this relationship. Calibrated results obtained using data from Korea show that a reduction in only the corporate income tax rate slightly decreases total employment, but a reduction in the corporate income tax rate accompanied by a decline in the bargaining power of labor unions significantly increases total employment.

기업의 기부금 지출 결정요인

Corporate donations is one of the most traditional firm policy for the corporate social responsibility. This paper examines the determinants of corporate donations using Tobit model. I constructed the firm-level panel data of 683 listed companies in Korea from 2000 to 2022. The estimation results find out that the corporate donations increase as the firm size is bigger, the debt ratio is lower, and the cash-flow ratio is higher. ROA has a significantly positive impact on the corporate donations during the whole analysis period, but it loses its significance for the sub-sample excluding global financial crisis and Corona-19 pandemic period. The results also show that firms donate more as they spends more money on advertising and R&D expenditure. Reduction of corporate tax rate in 2009 decreased the corporate donations significantly, and it has not been recovered to the initial level before the tax cut even after the tax rate re-increased in 2018. Change in tax deduction policy in 2014 did not affect corporate donations.

A Comparative Evaluation of Fiscal Stabilization Strategies during the Covid-19 Pandemic with Germany as a Reference Point

Abstract We provide a comparative evaluation of fiscal stabilization strategies during the Covid-19 pandemic. For this purpose, we use Germany’s temporary value-added tax (VAT) rate reduction as a reference point. We construct a credible counterfactual for Germany in a two-step procedure. First, we carry out a careful pre-selection of the donor pool countries to obtain a control group that is highly similar to Germany regarding important post-treatment characteristics. Second, we apply a reweighting scheme on the pre-selected donor countries. The synthetic control group only differs from Germany in the way that it did not implement the temporary VAT rate reduction. Our results indicate that the German VAT cut policy and partial VAT reductions in other countries were relatively ineffective in stimulating consumption with regards to their costs when compared to other measures such as (targeted) direct cash transfers (e.g. implemented in Canada, Denmark, Japan, and the United States). We attribute this to the fact that direct cash transfers are more comprehensible, salient, and actionable, in particular, in a dynamic environment with high uncertainty induced by unclear future economic prospects.

Research on the Evolution Game of The Digital Transformation of Cold Chain Logistics Enterprises Under the Government's Participation

Whether cold chain logistics enterprises choose to carry out digital transformation is a process of evolutionary game. By analyzing the evolution and stability strategy in the process of digital transformation of cold chain logistics enterprises under the participation of the government, and using matlab for simulation, we discuss the influence of each parameter on the decision-making of cold chain logistics enterprises. The results show that the cost of digital transformation of cold chain logistics enterprises will hinder their transformation, and the increase coefficient of enterprise income, the increase of government subsidies and the reduction of tax rate will all promote the implementation of digital transformation of cold chain logistics enterprises. Finally, corresponding countermeasures are put forward to accelerate the digital transformation of cold chain logistics enterprises, so as to lay a solid foundation for the further economic development of the whole country.

The effects of VAT reductions on newly built properties and constructions in Hungary

Motives: This study was undertaken to determine the feasibility and macroeconomic impact of reduced VAT. As an EU Member State, Hungary may apply reduced tax rates in accordance with the Council Directive 112/2006/EC. In Hungary, due to the high general tax rate, the range of products and services with reduced tax rates plays a special role.Aim: In Hungary, a preferential VAT regime was introduced to reduce the increase in the price of new-build properties. The aim of this study was to examine whether reduced VAT had the desired effect. Therefore, the effect of 5% VAT on the Hungarian real estate price index was analysed based on the data provided by the Hungarian National Bank with the use of various statistical methods.Results: The study demonstrated that a reduced VAT rate on newly built properties that meet certain conditions in Hungary had an impact on the real estate market. The date of the building permit, which is a prerequisite for applying a reduced tax rate, increased real estate prices as an immediate effect, which was reduced somewhat by the final consumer price due to the reduced tax rate. This double effect stabilised the real estate market price index.

Administrative procedures as tax enforcement tools

We study how common administrative procedures affect firm tax evasion. We begin with the counter-intuitive observation that many firms bunch above, rather than below, large notches in China’s corporate income tax. Cross-sectional patterns suggest that administrative procedures in the prepayment and refund system served as de facto enforcement tools that prevented some firms from accessing the reduced tax rates below the notches. Following a regulatory reform that eliminated these procedures, bunching below the notches increased dramatically. The results imply a trade-off between reducing administrative barriers and allowing much taxpayer non-compliance in low-compliance environments.

The Impact of Reduced Tax Rate of Corporate Income Tax and Other Incentives in Foreign Direct Investments in Selected Balkan Countries

The Impact of Reduced Tax Rate of Corporate Income Tax and Other Incentives in Foreign Direct Investments in Selected Balkan Countries