Standard Tax Research Articles

Liability of legal entities for tax offenses: experience of foreign countries

The article is devoted to highlighting the experience of foreign countries regarding responsibility for tax offenses. It is noted that since the filling of the budget of any state depends on establishing a mechanism of control over the implementation of tax revenues from large taxpayers, namely from legal entities, the question arises of introducing legal responsibility for such entities for violation of established prescriptions. One of the tools to combat tax evasion in Europe is the standard tax justice model, which introduces several sanctions for legal entities that violate tax legislation. The existence of two approaches is emphasized: American and European. The first is characterized by harsh sanctions for committing tax offenses and the application of combined fines, while the second is more democratic, preventive in nature and establishes fixed amounts of fines depending on the magnitude of the violation and the presence of intent. The main attention is paid to the characteristics of liability that applies to legal entities in Italy and France. It was established that there were indicators for each country separately. The main attention is paid to the characteristics of liability that applies to legal entities in Italy and France. It was established that in 2020, the ‘Maturity Model’, a set of indicators developed for each country separately as a diagnostic tool for self-assessment, measures the maturity of the investigation of tax crimes, taking into account factors such as the efficiency of law enforcement, the level of cooperation between tax authorities and other law enforcement agencies, and the effectiveness of legal measures against tax offenders. The conducted study of applying the liability of legal entities of foreign countries for tax offenses gave grounds to conclude that its main types are administrative liability (including ‘quasi-criminal’) and criminal liability. The following prerequisites for the commission of tax offenses by legal entities are highlighted: imperfect policy on fighting corruption and fraud at the state level, which may include inadequate resources for enforcement, lack of transparency in government operations, or ineffective anti-corruption measures; loopholes in tax legislation, which became the impetus for the development of the shadow economy and, accordingly, the concealment of profits by legal entities, often by prior agreement; lack of a joint financial register of illegal financial flows; an inadequate system of sanctions against intermediaries who help legal entities avoid paying taxes and commit tax fraud.

Standard deduction for children for personal income tax: innovations in 2025

The study considers amendments to the Tax Code of the Russian Federation that change aspects of the provision of a standard tax deduction for children when calculating personal income tax, which applies to all organizations (including medical ones) that attract employees or persons under civil law contracts. An analysis of innovations in 2025 in this area was carried out — an increase in the size of the deduction for the second and subsequent children, an increase in the level of marginal income, if exceeded, the deduction will not be provided. It is noted that innovations are introduced not only in terms of the size of the deduction and limit limits when it is provided, but also in the part concerning the procedure for its provision — if a written statement of the taxpayer was previously required, then from 2025 the deduction will be provided without it if the tax agent has information about the dependent children of the taxpayer — for this, the employee provides one-time documents confirming the right to this deduction. Examples of calculating the size of the standard tax deduction for children according to the old and new rules are given.

The small open economy in a generalized gravity model

To provide sharp answers to basic questions in international trade, a standard approach is to focus on a small open economy (SOE). Whereas the classic tradition is to define a SOE as an economy that takes world prices as given, in the new trade literature it is defined instead as one that takes foreign-good prices and export demand schedules as given. We develop a gravity model that nests all its standard microfoundations and show how to take the limit so that an economy that becomes infinitesimally small behaves like a SOE. We then derive comparative statics and optimal policy for the SOE. Ignoring standard tax indeterminacies, optimal policy is characterized by export taxes and import tariffs equal to the (inverse) foreign demand and supply elasticities, respectively, and employment subsidies determined by the scale elasticity (under perfect competition) or markups (under monopolistic competition).

Improving VAT collection efficiency through policy design and compliance improvement and moderated by control of corruption

Value Added Tax (VAT) is increasingly relied upon by an increasing number of economies, as shown by the global trend of increasing standard tax rates, but raises questions about the efficiency of its levy. This study revisits the determinants of VAT collection efficiency by using the C-efficiency ratio approach. Using a dataset of countries in the SEAO region (East Asia, Southeast Asia, and the Pacific), this study was performed quantitatively using a panel data regression analysis. The results show that the government effectiveness index is unlikely to be an appropriate proxy for the compliance gap. In terms of the policy gap, policy changes by increasing the standard VAT rate might reduce the C-efficiency ratio, whereas lowering the VAT registration threshold might not improve the C-efficiency ratio. However, the control of corruption index as a moderating variable could antagonize the negative effect of the VAT standard rate on the C-efficiency ratio. This finding corroborates previous studies and encourages discussion to find variables that better measure compliance and policy gap.

CORPORATE TAX RATES IN THE CONTEXT OF MACROECONOMIC DETERMINANTS AS CRUCIAL ASPECTS OF EFFECTIVE CORPORATE TAXATION IN THE VISEGRAD GROUP COUNTRIES

The study examines the relationship between the effective tax rate, the nominal rate, and selected macroeconomic determinants. Correlation and regression analysis were used to analyze the impact of individual determinants and the nominal tax rate on the effective rate in the Visegrad Group countries from 2004 to 2022. The results of the analysis suggest different development directions of the standard tax rate in the Visegrad Group countries. While it decreased in the Czech Republic, the decline in Hungary and Slovakia was followed by an increase. In Poland, the standard tax rate remained almost unchanged. The results of linear regression demonstrated that in Slovakia, the Czech Republic, and Hungary the standard rate has a statistically significant impact on the effective tax rate. The result was not confirmed for Poland, where the standard rate was removed from the model due to the singularity problem.

Taxpayer Objection Efforts in Urban Land and Building Tax (PBB-P2) Dispute (Case Study At the Regional Revenue Agency of Madiun City)

The Madiun City Government is facing problems in resolving tax issues, which can be resolved through standard tax objection resolution. The legal basis used is Law No. 28 of 2009 concerning Regional Taxes and Regional Levies. BAPENDA Madiun City has the authority to manage land and building taxes based on these regulations. This research aims to determine legal efforts in filing objections to resolving tax disputes in the PBB-P2 field and the obstacles taxpayers face in making legal objections. The research method used is the normative legal research method. The research results state that taxpayers who feel that the NJOP value determined by Bapenda is not by the condition of their property can submit an appeal to the Tax Court Agency. The process begins with submitting an objection letter to Bapenda within a certain period after sending the tax notification. If the objection is not accepted, the taxpayer can appeal to the Tax Court Agency. However, in the case at the Madiun City Bapenda, the request for an objection to the NJOP value of land and buildings was not granted. There are several obstacles to legal action for taxpayers' objections to resolving tax disputes in the urban PBB sector in Madiun City, such as legal uncertainty and limitations of law enforcement agencies. Legal reform, increasing the capacity of law enforcement agencies, and increasing awareness of tax law among the public are needed to overcome this.

Species heights of Siberian spruce on the Yenisei Ridge

The work is based on materials from 15 sample plots laid out in mixed spruce stands of the Yenisei Ridge, with a relative completeness in the range of 1.62-1.27, belonging to the green moss group of forest types. Based on the data obtained, the features of changes in spruce species heights and their interdependence with other taxation characteristics were established. The results of data processing indicate the need to develop a set of taxation standards for the Yenisei Ridge region.

A conceptual model for standardized taxation of SMES in Nigeria: Addressing multiple taxation

Nigeria's small and medium-sized enterprises (SMEs) face significant challenges due to the complex and fragmented taxation system, which often results in multiple taxation and administrative burdens. This paper presents a conceptual model for standardized taxation aimed at addressing these issues and fostering a more efficient tax environment for SMEs. The proposed model seeks to streamline tax policies, reduce the incidence of multiple taxation, and enhance compliance through a unified framework. The model emphasizes the need for harmonizing tax regulations across federal, state, and local levels to eliminate inconsistencies and overlapping tax obligations. By implementing clear and consistent tax guidelines, the model aims to simplify the tax compliance process for SMEs and reduce the risk of double taxation. Additionally, the model proposes the introduction of a centralized digital platform to manage tax filings, payments, and documentation, which will improve efficiency and transparency in the taxation process. A critical component of the model is the establishment of standardized tax incentives and reliefs tailored to the needs of SMEs. These incentives are designed to encourage growth and investment while mitigating the negative impacts of excessive taxation. Furthermore, the model advocates for regular stakeholder engagement, including consultations with SMEs, tax authorities, and policymakers, to ensure that the tax policies are practical and effective. The expected outcomes of implementing this standardized taxation model include improved tax compliance, reduced administrative costs for SMEs, and a more transparent and predictable tax environment. By addressing the issues of multiple taxation and providing targeted support, the model aims to enhance the overall business climate for SMEs in Nigeria, contributing to economic growth and development.

The geography of mortgage interest deductions

We investigate the heterogeneous impact of the US federal mortgage interest deduction (MID) on households’ location and tenure decisions. We develop a spatial general-equilibrium model featuring non-homothetic preferences in which households can choose whether to claim the MID or a standard tax deduction. Repealing the MID decreases homeownership rates more strongly in central areas because owner-occupiers migrate to the countryside. Welfare increases slightly because positive externalities from less congested housing markets and undistorted tenure decisions outweigh productivity losses in central locations. An increase in standard tax deductions, as implemented in 2018 by the Tax Cuts and Jobs Act, leads to a similar welfare increase.

Belgian Tax Procedures Reformed with Focus on International Tax Matters

As part of the Belgian government’s plan to fight tax and social fraud, legislation was approved to provide the Belgian tax authorities with a much broader toolset for investigating taxpayers. The main pillar of this legislation is the extension of the standard tax assessment, investigation and retention periods. The extended statute of limitations – which applies to both income taxes and VAT – seems to focus on cross-border transactions in particular.

Can Ethics and Economic Incentives Mitigate Tax preparers’ Aggressive Judgements and Decisions?

ABSTRACT We examine whether the personal attribute of ethics and an external economic incentive in the form of a standard tax preparation fee can mitigate tax preparers’ aggressive tax reporting behaviour. We use a structural equation model (SEM) to identify the influential paths of ethics and economic incentives on the aggressiveness of tax preparers. Based on the results of a quasi-experiment involving tax preparers in Korea, we find that ethical attributes both directly and indirectly mitigate aggressive tax reporting by reducing tax preparers’ fear of client dissatisfaction. We then find that the introduction of a standard tax preparation fee does not directly or indirectly suppress the tax aggressiveness of tax preparers. Our study contributes to an integral examination of the effectiveness of both psychological and economic factors on tax preparers’ judgements and decisions.

Роль стимулирующих эффектов НДФЛ в реализации национальных проектов

The subject of the study is the tax tools used to facilitate the implementation of the tasks of national projects. The purpose of the work is to assess the stimulating effects of personal income tax in the context of the implementation of national projects. The article considers national projects that are part of the "Human Capital" block and are of a social nature. The potential opportunities have been identified and the real results of using the stimulating effects of personal income tax to help achieve the targets of the national projects "Healthcare", "Education" and "Demography" have been revealed. The conclusion is made about ensuring greater efficiency in achieving the targets of national projects of direct budgetary mechanisms against indirect tax instruments. At the same time, it is determined that tax instruments that entail less burden on the budget system can also contribute to achieving the goals set. It is concluded that, despite the opportunities available in the personal income tax system due to the provision of social and standard tax deductions for children, they are not fully implemented and do not contribute to achieving the goals of national projects. It is necessary to improve the procedure for personal income tax taxation both in terms of bringing the amount of tax deductions provided in line with the real cost of treatment and education services, and in terms of indexing the amounts of standard deductions for children with a focus on their provision to the least well-off segments of the population, which is achieved by simultaneously increasing the amount of deductions provided and limiting the amount of annual income that allows you to qualify for receiving such deductions.

빅데이터에 대한 과세문제

Big data is the generation and analysis of valuable data in large quantities with data, and has recently been developed through convergence with artificial intelligence and the Internet of Things. Big data technology, in which a vast amount of data is collected and who can more elaborately analyze and utilize the collected data, has become an era that determines the competitiveness of a company or country. The economic value of big data is increasing day by day, and companies are generating profits by using big data not only in domestic transactions but also in international transactions. I wanted to study how to solve the problem of taxation on profits generated by big data.
 As for the taxation of big data, it is important to understand the legal nature of big data, and it is connected to data, which is the root of big data. Therefore, we tried to understand the legal nature of big data through the legal nature of data. Currently, there is no legal concept for big data, but the legal concept of data has been established with the recent enactment of the Data Industry Act. The Data Industry Act stipulates activities related to production, distribution, transaction, and utilization of data and the data industry that provides these services in order to create economic added value. From the perspective of the Data Industry Act, big data can be included in the concept of data under the Data Industry Act or understood as the same concept.
 The Data Industry Act recognizes that data has economic value, that is, data itself as an asset, but the tax law or corporate accounting standards do not clearly determine which asset is included in data. This can lead to problems with taxation of big data. Therefore, since data or big data is stated to have property under the Data Industry Act, it would be reasonable to regard data as intangible assets and goods by recognizing the nature set forth in the relevant laws in the tax law, and the tax base should be set according to that concept.
 On the other hand, as the 4th industry develops, big data is expected to increase domestic and international transactions. In particular, since the taxation standards for big data are not clearly defined for each country, international transactions of big data will appear as a problem of tax jurisdiction due to deficiencies in tax laws in each country. In the current situation, tax law interprets data from the perspective of intangible assets, and international transactions of big data are also regarded as international transactions of intangible assets, so it seems that there is no choice but to be taxed.

A model for foreign direct investment (FDI) promotion through standardized tax policies in Nigeria

This paper presents a model for promoting Foreign Direct Investment (FDI) in Nigeria through the implementation of standardized tax policies. The model seeks to address the inconsistencies in Nigeria’s tax framework that hinder the inflow of foreign investments. By proposing a streamlined, transparent, and investor-friendly tax regime, the model aims to attract and retain foreign investors while fostering economic growth. The model emphasizes the importance of harmonizing tax policies across federal, state, and local levels to eliminate discrepancies that create uncertainties for investors. It advocates for clear and consistent tax incentives tailored to sectors with high FDI potential, such as manufacturing, agriculture, and technology. Additionally, the model calls for the reduction of bureaucratic inefficiencies in tax administration, which often discourage foreign investors due to delays and lack of transparency. A key component of this model is the establishment of a centralized digital platform for tax registration and compliance. This system would streamline tax processes, ensuring clarity in tax obligations, reducing corruption, and improving ease of doing business. Furthermore, the model promotes the creation of bilateral tax treaties that protect foreign investors from double taxation, enhancing Nigeria’s global competitiveness as an FDI destination. The paper also underscores the role of tax reforms in promoting investor confidence, advocating for a consultative approach where investors, policymakers, and industry stakeholders collaborate to shape tax policies. By implementing this model, Nigeria could see a significant increase in FDI inflows, which would contribute to job creation, infrastructure development, and technology transfer, ultimately leading to long-term economic stability.

Review of Foreign Experience in the Performance Audit of Tax and Customs Administration

President of Kazakhstan Kassym-Jomart Tokayev’s State of the Nation Address, September 1, 2020 “Kazakhstan in a new reality: time for action” he stressed the need and importance of а fair redistribution of national income, thereby developing а tax policy that is understandable to all citizens of the country . At the same time, tax administration is complex and clearly coercive in nature. The message also emphasizes the need to diversify tax rates as an additional lever for diversifying the economy and supplementing the budget. International taxation standards require special attention in order to maximize the flow of foreign investments to Kazakhstan and profitable reinvestment. In addition, according to experts, GDP almost a third of them are in shadow countries - great potential for increasing budget revenues. Digitization of the tax and customs sectors will significantly help in the fight against the "shadow economy" in all its manifestations. The new budget planning system should ensure national priorities and become a subordinate part of the national planning system.Conducting an audit of the effectiveness of tax and customs administration is one of the main areas of external state audit, thereby determining the relevance of the research topic.
 Given that the purpose of public audit is to improve the efficiency of management and use of budgetary funds, assets of the state and entities of the quasi-public sector, it became necessary to create a methodological framework for public audit that complies with the guidelines of the Lima Declaration and international audit standards. Additionally, as well as improve the legislative and methodological framework of the current system of public audit.
 The article deals with the issue of performance audit of tax and customs administration, as well as foreign experience in performance audit of tax and customs administration. To achieve these goals, the topic of the concept of tax and customs administration is disclosed. Another resolved issue is foreign experience in performance audit of tax and customs administration.

EXPERIENCE OF FORMING BUDGET EQUALIZATION SYSTEMS IN THE COUNTRIES OF THE ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT

Topicality. Reforming of the state regional policy and increasing of the socio-economic level of development of administrative-territorial units require comprehensive research and study of the experience of foreign countries regarding the methods of forming budget resources and finding an effective model of budget equalization, which is especially relevant in the context of the decentralization reform.Aim and tasks. To carry out the analysis of budget equalization systems in the countries of the Organization for economic cooperation and development, and to substantiate the possibility of using foreign experience of budget equalization in Ukraine.Research results. In foreign practice, several basic models of budget equalization are distinguished: horizontal and vertical equalization of income or expenses. A representative taxation system with a standard set of taxes is used to assess the possibility of revenue collection. The expenses equalization model compared to the income equalization model provides an answer to the question of whether the community has become capable, or how close it has come to it. A necessary condition for the application of this model is the availability of expenses standards for the provision of public services. The "gap-filling" fiscal equalization model combines expenditure and income equalization into a single transfer designed to fill the gap between financial needs and income. In practice, there are very few countries that use only one of the budget equalization models. Basically, there is a combination of different models and methods of horizontal and vertical equalization of income and expenses. The basis of the construction of budget equalization systems are the coefficients and formulas used to determine the size of equalization transfers. Systems that include elements of income equalization usually rely on a standard set of taxes and standard tax rates. At the same time, one of the solutions is to use a small set of taxes. Expenses equalization systems are more complex because cost estimation often involves a large number of factors. In some countries, regression-based standardized costing approaches have been used. Budget equalization systems are not static entities, the norm of the need for their periodic analysis and evaluation is often included in the legislation underlying them. Such an analysis can lead to reforms of budget equalization systems. Several key factors motivating the reform of equalization systems were identified: growing or high levels of inequality in the fiscal capabilities of communities, regional incomes or the provision of public services; insufficient fiscal autonomy; unstable and non-transparent budget alignment; inadequate incentives and lack of political neutrality in the budget equalization system. Reform of budget equalization systems in OECD countries is carried out in the following directions: transition to systems based on rules; increasing the fiscal autonomy of communities; simplification of alignment formulas; simplification of the representative tax system; periodic review of alignment formulas.Conclusion. In practice, there are very few countries that use only one of the budget equalization models. Basically, there is a combination of different models and methods of horizontal and vertical equalization of income and expenses. The basis of the construction of budget equalization systems are the coefficients and formulas used to determine the size of equalization transfers. The income equalization system relies on a standard set of taxes and standard tax rates. Cost equalization systems are more complex because cost estimation often involves a large number of factors. Budget equalization systems are not static entities, the norm of the need for their periodic analysis and evaluation is often included in the legislation underlying them.

Information Sharing between Tax and Statutory Auditors: Implications for Tax Audit Efficiency

ABSTRACT We examine whether tax audits become more efficient if tax auditors have access to information about statutory audit adjustments. To this end, we extend the standard tax compliance game by including a statutory auditor and analyze the strategic interactions among a firm issuing financial and tax reports, a statutory auditor, and a tax auditor. We show that granting the tax auditor access to information on statutory audit adjustments can, in some cases, increase tax revenues while simultaneously decreasing tax audit frequency. Thus, more information sharing between statutory and tax auditors could be a policy instrument to combat tax evasion and increase tax audit efficiency. However, the tax audit efficiency enhancing effect comes at the cost of a reduction in financial statement quality as the probability of overstated financial assets increases. Moreover, depending on the importance of firms' financial statement valuation, the additional information may also reduce tax revenues. The regulator must, therefore, carefully weigh the potential efficiency gains from information sharing on statutory audit adjustments that are derived in this study against the potential efficiency losses.

Transitioning MSMEs to the Normal Tax System

It is not straightforward to urge and prepare MSMEs to participate in the standard tax system. MSMEs must have adequate tax knowledge and competence to comply with their tax obligations after they enter the standard tax system. The research aims to develop a strategy for transitioning to a normal tax system from the perspective of both the taxpayer and the government, including the barriers encountered. This study used a qualitative approach and an in-depth interview to obtain data. A review of the literature was conducted, as well as in-depth interviews with DGT officials, tax scholars, tax practitioners, and SME taxpayers. The most recent rule on final income tax for MSMEs establishes a time restriction for applying the final income tax rate and recording. The grace period was designed to teach MSMEs how to manage their bookkeeping and other obligations under the conventional tax system while growing their business. According to the study's findings, MSMEs taxpayers do not have a distinct strategy for dealing with the conventional tax system. They do, however, have commercial plans that overlap with the transition strategy. On the other hand, the government, through DGT, launched a plan called Business Development Services. The challenges of human resources and initiative affect both government and MSMEs taxpayers. This article examines the strategic procedures necessary to convert MSME taxpayers from a presumptive tax regime to the implementation of a conventional tax system, as well as the barriers encountered in achieving tax equity. The report proposes a transition strategy from a presumptive, tax regime to the implementation of a conventional tax system on the hard-to-tax sector by the Indonesian tax authorities and MSME taxpayers.

Improving Tax Audit Efficiency Using Machine Learning: The Role of Taxpayer’s Network Data in Fraud Detection

ABSTRACT Using the universe of Armenian business tax payers operating under a standard tax regime, we develop a fraud prediction model based on machine learning tools, with gradient boosting as the primary choice. Having to deal with broadly defined fraud and heterogeneous taxpayers, as well as a relatively small sample, we successfully derive important features from tax returns with a minimum of additional information. Among the important fraud predictors, we obtain historical fraud and audit, share of administrative costs, and external economic activity. We see two main contributions with generalizable practical implications for auditing authorities. First, by focusing on the lift score of the top decile, we demonstrate that even moderately accurate models can improve upon existing accuracy of rule-based approaches. Second, and more importantly, we demonstrate that the information contained in the supplier and buyer network of the taxpayer can be used whenever important predictors of fraud such as historical audits and fraud are not available. This is particularly important for situations with newly established companies, who would otherwise be under-rated in terms of fraud probability.

Unemployment, tax competition, and tax transfer policy

AbstractThe reduction of capital tax rates witnessed over the past two decades has been motivated by the wish to boost investment and reduce unemployment. Previous models of tax competition have explored the consequences for capital allocation in great detail, but have mostly been silent on the employment effects due to the assumption of a perfect labor market. To address the impact of tax competition on employment and public good provision, this paper reconsiders the analysis in the presence of a labor market imperfection that generates unemployment. We incorporate a wage rigidity and intergovernmental transfers financed by the labor income tax into the standard tax competition model to explore the outcome of federal–state policy interaction. The key factors in determining the efficiency are the capital–labor substitutability/complementary and the cost of the efficient level of public good supply relative to the ability of the labor income to generate revenue. When the labor income tax is insufficient for financing, there can only be efficiency if the aggregate externality is negative—but this outcome is only one of multiple equilibria. We also show that federal government leadership is effective to provide public goods efficiently by state governments if capital and labor are substitutes.