Tax Credit System Research Articles

Research on Legal Issues of Tax Collection and Administration for Online Live Streaming Rewards

With the tide of the digital economy, an increasing number of individuals are showcasing their talents through online live streaming and earning reward income. However, compared to other income sources of the streamers, the nature of live streaming rewards presents a significant challenge to tax authorities due to its concealed characteristics. Based on the current legislative status in our country, this paper deeply analyzes the connotation and classification of live streaming reward income, revealing numerous issues faced in the field of tax collection and administration. These issues include but are not limited to the ambiguity of the taxpayer, unclear tax categories and rates, imperfect tax reporting systems, underdeveloped tax information sharing mechanisms, and an incomplete tax credit system. To effectively address these challenges, this paper constructs an overall framework around the elements of taxation and, in conjunction with existing tax laws and regulations, proposes practical and feasible suggestions for improvement.

증여재산공제의 문제점과 개선방안

Currently, the policy direction of the global inheritance and gift tax is changing to promote economic revitalization by promoting the transfer of wealth to the younger generation rather than suppressing the inheritance of wealth. In the case of Korea, there are attempts to follow the global trend to the extent that it does not impair the role of wealth redistribution, but it is true that more research is still needed on the gift tax system. In particular, the gift property deduction of the current gift tax has not been revised since the revision in 2015.
 Statistics show an increasing trend in both inheritance tax and gift tax, which is increasing their importance in Korea's tax revenue. Under these circumstances, the fact that the gift property deduction has not been revised for nearly 10 years is an issue that makes people feel the need for revision more.
 In the case of the United States, instead of integrating the deduction limit for estate tax and gift tax by operating the integrated tax credit system, the amount is set large and the amount is increased or decreased according to prices. In the case of Japan, similar to Korea, the basic deduction system is operated, but unlike Korea, the amount of the deduction is initialized every year to allow taxpayers to make a reasonable gift plan.
 Tax revision must be made in a way that does not impair its essence, but it is also important to reflect reality. Therefore, the inheritance and gift tax should not impair the essential role of limiting the inheritance of wealth, but it is necessary to find a way to transfer wealth to the younger generation in a reasonable way. As a solution, the following two are suggested. First, the combined period of the gifted property deduction is reduced from the current 10 years to 5 years. Next, it is proposed to increase the spouse deduction limit for the gifted property deduction from the current 600 million.

Storing the future of energy: Navigating energy storage policy to promote clean energy generation

AbstractThe United States has experienced heightened interest in clean energy sources, with many states implementing renewable technologies for energy generation. These efforts are critical for moving states and the nation toward decarbonization and decreased emissions within the transportation and power industries. A challenge with renewable sources (particularly solar and wind) is the inherent variability of energy generation due to climate and geographic influences. Consequently, there is increased interest in addressing energy storage technologies to better capitalize on excess power from high‐production periods for use in times of low generation. Energy storage comes in many different forms with varying duration. Several forms of energy storage are explored in this report to demonstrate the variety of technology options. Following research of the current state of energy storage policy, this work proposes three areas of potential policy improvements for industry: (1) implementation of a policy framework for states to produce ambitious energy storage procurement metrics; (2) amending of the federal investment tax credit for energy storage technologies to be duration‐based; and (3) incentivization of sustainable battery practices. It is imperative for state legislatures to create informed energy storage goals alongside current renewable energy metrics. Amending the modern federal investment tax credit system to include duration‐based incentivization will encourage the deployment of long‐duration technologies to combat variation in electricity generation over the course of seasons. Finally, for the continued deployment of batteries, sustainable practices must be implemented to mitigate material and environmental challenges posed by them, including recycling practices and alternative chemistry utilization.

Exact analytical grossing up computation as data imputation technique in Mathematica

<h2>Abstract</h2> The presented software package enables missing data imputation in datasets used in economic and social policy simulation studies where gross personal income computation (known as grossing-up procedure in literature) from other available data is not trivial. The package is generally applicable to modern tax systems around the world and allows for gross personal income computation at the individual level based on net personal income and relevant income tax parameters, such as tax allowances, tax schedule, tax credit system, and social security contributions, in various combinations.

An Equity-Based, Multilateral Approach for Sourcing Income Among Nations

The source of income rules used in the United States and elsewhere in large part establish the contours of income tax jurisdiction that is exercised by countries. Source rules do this by allocating a taxpayer's income for purposes of assigning countries their rights to tax such income. Thus, source rules are of critical importance in the functioning of the income tax rules that apply to cross-border business and investment activities.The source rules play a vital role in the foreign tax credit system applicable to U.S. persons with foreign investment or business activities. This is because a U.S. taxpayer is subject to an annual foreign tax credit limitation, which is generally equal to the taxpayer's average U.S. tax rate multiplied by the taxpayer's foreign source income as determined under the source rules. The source rules also play a central role in the United States' exercise of taxation over foreign persons with U.S. businesses or investments. For the most part, only U.S. source income is subject to tax under the U.S. tax regimes that apply to foreign persons. Moreover, if the United States were to move to a full or partial territorial system for taxing U.S. persons, the source rules would assume even greater importance given that they would determine whether the United States would impose any tax (as opposed to a residual tax) on the income of U.S. persons from crossborder activities. Other countries likewise use source rules or their equivalent in applying foreign tax credit or territorial systems to their residents and exercising source taxation over nonresidents.

Effects of tax benefits on the price elasticity of charitable contributions in South Korea

AbstractUsing South Korean panel data from 2008 to 2019 and censored quantile regression method, this study calculates the effects of different tax incentives on charitable contributions. We observe price elasticity under two different tax‐benefit systems in South Korea and find that, first, taxpayers tend to be more sensitive to tax incentives under a tax deduction system than a tax credit system. The price elasticity gap between a tax deduction and tax credit is approximately −2.3 to −1.0. Second, we show the existence of heterogeneity in taxpayers’ behaviour: the price elasticity of charitable contributions exhibits a convex shape, where more significant donors have lesser reactions to tax incentives. We further show that socioeconomic contexts, such as income, gender, marital status, and education, affect people's attitudes. In sum, the results are as expected: tax deductions work more efficiently than tax credits.

Rentiers of the low-carbon economy? Renewable energy's extractive fiscal geographies

Progressive movements today call for transformative state-led investment in renewable energy and other climate infrastructures—in the United States, a vision that confronts inherited legacies of austerity. I argue that a significant obstacle is the neoliberal toolkit through which the US federal government subsidizes renewables, an indirect, highly opaque system of tax credits and incentives. For forty years, tax subsidies have ‘paid’ private financial players to invest in renewables, via allowing them to claim legal tax shelters against their other income. In this political economic analysis, I question, first, how US renewable energy acquired this peculiar form of public finance ‘through the tax code’, unique in the global industry. Second, I explore how the model has shaped US renewables financing, development, and ownership. I center two decisive moments: the California ‘wind rush’ in the 1980s, and the ongoing renewables boom of the last fifteen years. This history articulates financial experiments and tax sheltering scandals of the Reagan Administration with exploitation returned today in more organized (and lucrative) form, as ‘tax equity’ finance. Via tax equity, a handful of major US banks dominate financing for renewables and other politically embattled public goods. They exert a troubling ability to extract rents for their capital, gatekeep what projects get built and by whom, and stall US renewables development altogether. Today, the practice is increasingly strained by these and other problems—growing public costs, private capacity ceilings, and amplification of sectoral crises. Under Biden, it faces probable reform, but may need more comprehensive reimagination.

Study on the effect of digital tax and global minimum tax to the Korean foreign tax credit system - focusing on preventing international double taxation -

Study on the effect of digital tax and global minimum tax to the Korean foreign tax credit system - focusing on preventing international double taxation -

1985 reform of the Australian tax system

After the tumult of the Whitlam government, the Fraser government (1975-1983) saw consolidation with less reform. The 1975 Asprey report remained largely unactioned, despite the fundamental problems that burdened the Australian tax system. The 1983 election of the Hawke government, however, set in train a series of economic reforms, and tax would play a big part in these. This paper tracks those developments, starting with the tax avoidance and evasion issues that plagued the era and the 1981 Campbell Committee financial system review. The main focus, though, is on the 1985 draft white paper and tax summit that delivered the first instalment of the Asprey blueprint. While the broad-based consumption tax didn’t get up, the package reformed Australia’s income tax system, with a capital gains tax, a fringe benefits tax, a foreign tax credit system and a dividend imputation system.

Post-War Tax Reviews and the Asprey Blueprint

After World War II, international attention turned to economic reconstruction and the transition back to peace-time. As Australia settled into the 1950s and 1960s ‘golden years’ there wasn’t an obvious imperative to tackle basic economic reform and tax design issues. Underlying structural problems were building, though, that would ultimately call for an economic reform agenda and tax would be part of that. This paper tracks these developments, looking at some limited tax reviews along the way but the main focus will be on the 1975 Asprey review which provided a blueprint for reform of the Australian tax system. Its recommendations for a capital gains tax, a fringe benefits tax, a foreign tax credit system, dividend imputation and a value added tax would take 25 years to implement.

In-work Universal Credit: Claimant Experiences of Conditionality Mismatches and Counterproductive Benefit Sanctions

AbstractUniversal Credit is the UK’s globally innovative social security reform that replaces six means tested benefits with one monthly payment for working age claimants - combining social security and tax credit systems. Universal Credit expands welfare conditionality via mandatory job search conditions to enhance ‘progression’ amongst working claimants by requiring extra working hours or multiple jobs. This exposes low paid workers to tough benefit sanctions for non-compliance, which could remove essential income indefinitely or for fixed periods of up to three years. Our unique contribution is to establish how this new regime is experienced at micro level by in-work claimants over time. We present findings from Qualitative Longitudinal Research (141 interviews with 58 claimants, 2014-17), to demonstrate how UC impacts on in-work recipients and how conditionality produces a new coerced worker-claimant model of social support. We identify a series of welfare conditionality mismatches and conclude that conditionality for in-work claimants is largely counterproductive. This implies a redesign of the UK system and serves as an international warning to potential policy emulators.

Modernization of Tax Governance and Total Factor Productivity of Enterprises: Research Based on Quasi-natural Experiment of Tax Credit Rating

Tax revenue is the main way for the state to absorb fiscal revenue, and it also plays a fundamental, pillar and guarantee role in national governance. Therefore, the modernization of tax governance is an important part of the modernization of national governance system and governance capacity. The realization of this goal requires the tax department not only to levy taxes according to law under the legal principle, and provide financial guarantee for national governance, but also to take into account the tax service, improve the tax business environment, and inject vitality into the high-quality economic development. At present, China’s economy has changed from a high-speed growth stage to a high-quality development stage, and is in the critical period of transforming the development mode, optimizing the economic structure and transforming the growth momentum, so it is urgent to improve the total factor productivity. Combined with this realistic background, this paper aims to answer: Can the modernization of tax governance promote enterprises to improve the total factor productivity? This is an important issue.In 2014, the State Administration of Taxation issued“the Measures for the Administration of Tax Payment Credit（Trial）”, which carries out the investigation, rating and public release of the tax credit status of enterprises every year, and implements joint credit incentive measures based on the rating results, so as to promote the integrity and self-discipline of taxpayers and improve the compliance of tax law. In practice, the tax authorities promote the“bank-tax interaction”across the country, exchange“credit”for“credit”incentive measures to help enterprises develop. According to the statistics of the tax department, by the end of September 2019, banking financial institutions across the country have issued 1.069 million loans related to“bank-tax interaction”to trustworthy enterprises, involving a total of 1.57 trillion yuan of bank tax loans. As a new type of tax governance, the enterprise tax credit management measures effectively fit the modern tax governance concept, and provide rich materials and appropriate entry point for our research. This paper takes the disclosure of corporate tax credit rating data in 2015 as a quasi-natural experiment, and uses the PSM-DID method to empirically analyze the impact effect, heterogeneity performance and mechanism of tax governance modernization on the total factor productivity of enterprises.This paper finds that: The implementation of enterprise tax credit rating system significantly improves the total factor productivity of enterprises, and this effect is more obvious for non-state-owned enterprises and enterprises with greater financing constraints. Further analysis shows that the above positive effects are mainly achieved by alleviating the financing constraints of enterprises, improving investment efficiency and playing the role of corporate governance. This conclusion provides empirical evidence for understanding the micro effect of tax governance modernization, affirms its positive role in high-quality economic development, and provides policy reference for improving the existing tax governance measures. In the future, we should pay attention to the collaborative governance effect of flexible incentive collection and management measures, further improve the tax credit evaluation system, and build a tax collection and management system with the“Tax Collection and Management Law”as the guide, and the tax risk management and tax credit system construction as the two wings, so as to lay a scientific and strict system foundation for continuously improving the tax governance ability and building a modern tax governance system.

Asimetría de regímenes en los sistemas de crédito externos bajo la legislación chilena

Prior to the enactment of Law 21,210, published on February 24, 2020, the Chilean Income Tax Law contained several provisions governing the treatment of taxes paid abroad to be used as tax credits in Chile (Article 41 A, 41 C and 41 G). Under said legislation, there were number of mismatches between these provisions that generated certain inefficiencies and inequities, which resulted in burdensome situations for some taxpayers. Among other measures, Law 21,210 consolidated the foreign tax credit system into a new provision, introducing a unified regime.

Equilibrium audit strategies against tax treaty shopping

AbstractThis paper examines game‐theoretic models of tax treaty shopping. An investor can choose a direct or indirect investment route across countries to minimize tax. A tax agency can audit the investor. The audit is costly but it can give additional revenue to the tax agency. In simultaneous‐move games, regardless of whether incomplete information exists and whether a home country allows foreign tax credits, there are mixed‐strategy equilibria where the investor may choose tax‐minimizing indirect routes and the tax agency may audit the investor. This equilibrium random audit strategy helps the tax agency raise revenue and reduce treaty shopping. Comparative statics yields an implication consistent with empirical evidence. However, if the home country has a foreign tax credit system with a high tax rate, or if the tax agency observes the investor's action in a sequential‐move game, the investor always chooses the direct route, and no treaty shopping occurs in equilibrium.

A Study on Deemed Input Tax Credit System of VATto Food Service Industry

A Study on Deemed Input Tax Credit System of VATto Food Service Industry

The Research of R&amp;D Tax Credit System Effect on Tax Burden ：Focus on Information Technology Company

The Research of R&amp;D Tax Credit System Effect on Tax Burden ：Focus on Information Technology Company

Partial Repeal of Foreign Tax Credits by the Tax Cuts and Jobs Act: Resulting Behavioral Incentives, Self-Help, and New Mechanics for Some Remaining Portions of the Credit

The new Tax Cuts and Jobs Act repeals approximately one-third of the foreign tax credit system. (The foreign tax credit generally reduces U.S. tax by the amount of the U.S. taxpayer’s foreign income taxes, subject to many requirements.) Essentially, partial repeal will make it much harder to claim credits for foreign taxes imposed on a foreign subsidiary’s active income, other than limited credits for certain foreign taxes associated with the newly created GILTI (“global intangible low-taxed income”) inclusion. However, taxpayers are likely to engage in self-help by creating do-it-yourself replacements for the repealed provision. These self-help strategies may use hybrid entities (entities treated differently under U.S. and foreign law) and the legal liability rule’s deference to the relevant foreign law’s determination of which taxpayer bears the foreign tax. Absent such self-help, partial repeal of the foreign tax credit is likely to change taxpayer behavior, because it alters the incentives for choosing between locations for earning income. Foreign tax rates are now more likely, compared to pre-2018 taxable years, to make a difference when taxpayers choose between doing business in the U.S. and doing business abroad, and between various foreign countries. The net result may be an incentive to earn active income in low-tax foreign countries, rather than in the U.S. or in high-tax foreign countries. In addition, the mechanics have drastically changed for one of the remaining portions of the foreign tax credit. The “deemed paid” credit for certain foreign subsidiaries’ foreign taxes, available in connection with a U.S. shareholder’s inclusion of the “subpart F” (usually passive-type) income of such subsidiaries, formerly cross-referenced a pro rata formula. That formula has been repealed. Now such deemed paid taxes will be computed using a completely different approach that requires identifying the “properly attributable” foreign taxes. Because this new concept is undefined, taxpayers can take aggressive interpretations of the new standard until agency guidance is issued.

The Method of Assessing the State’s Financial Security Level

Within the modern economic environment, Russia has faced a number of problems. In this regard, it becomes important for state authorities to focus on the issues of ensuring the state’s financial security. The article aims to define the method of as-sessing the state’s financial security level. The following scientific research methods are used in the paper: the deductive method is used to comprehend the general theories, the essence and the meaning of the state’s financial security; the method of analysis is used to describe the theory and practice of the state’s financial security; and the method of synthesis is used to obtain the summarized results of the research, to formulate conclusions and general statements regarding the problems of the state’s financial security and the methods of its assessment. The scientific justification of the identified problems and the development of the theory and method-ology is carried out based on the principles of the system approach. The system of financial security indicators that reflects the criti-cal points of the financial system and the financial relations in the Russian Federation must comprise the security indicators of the budget and tax system, the banking and credit system, and the currency and monetary system. It should be noted that in order to determine threats and destabilizing factors in advance, a comprehensive system of financial security indicators should be formed and adequate threshold limit values for those should be calculated. It should be emphasized that implicit usage of other authors’ methods to calculate the financial security level, as well as adhering to benchmarks only are not sufficient to conduct a comprehensive analy-sis of the state’s financial security.

A Review of Goods and Services Tax (GST): Impact on Indian Stock exchanges and various stock Sectors

Till such time as GST fears subside, it is good to look at stocks outside the Sensex. For those with strong nerves, it would make sense to play the contrarian game, ahead of the RBI’s credit policy change in August. Analysts believe the short-term impact of GST could be neutral to negative and positive, though this huge tax overhaul is expected to give further direction to the economy and markets. There are expectations that GST will boost India’s GDP growth by 150-200 basis points in the coming years. However, the rollout may impact first quarter earnings of India Inc, as companies will take some time to align their production processes with the new framework, adjust to the input tax credit system and get a handle on their working capital requirements. Input credit allows a seller to reduce the tax burden being paid by claiming offset for the taxes already paid on inputs.

A Comparative Analysis of the Indirect Foreign Tax Credit in Latin America and in the United States – Part II

Part II of this article continues the country-based comparison of indirect foreign tax credit systems started in Part I by considering Mexico and the United States. These systems are then compared in all five countries examined. The article next considers the relevant policy issues before ending with conclusions and recommendations.