Tax Benefits Research Articles

A Review on Techno-Economic Study for Supporting Building with PV-Grid-Connected Systems under Saudi Regulations

As the demand for electricity continues to grow in Saudi Arabia, finding ways to increase power generation becomes increasingly important. However, conventional power generation methods such as burning fossil fuels contribute significantly to environmental pollution and harm human health through the emissions of greenhouse gases. One potential solution to this problem is the use of solar energy, which has the advantage of being abundant in Saudi Arabia due to its location in the sun belt. When compared to conventional power generation methods, solar energy is a viable alternative, particularly when the indirect costs of fossil fuels, such as harm to the environment and human health, are considered. Using photovoltaic cells to convert sunlight into electrical energy is a key method for producing clean energy. Despite the initial cost of investing in solar energy infrastructure, it is ultimately less expensive than electricity derived from fossil fuels. In recognition of the potential of solar energy, the Saudi government has outlined an ambitious plan to install 41 GW of solar capacity and invest USD 108.9 billion by 2032. Additionally, financing and significant tax benefits have been provided to promote the development of the solar industry. This research article reviews the techno-economic analysis of PV power plants and examines previous policy papers and the existing research on the topic.

ON TAX INCENTIVES FOR BUSINESS IN UKRAINE DURING THE RUSSIAN MILITARY INVASION

Аbstract. The article is devoted to the problems of tax stimulation of economic activity of economic entities of Ukraine due to the introduction of martial law. The purpose of the study is to assess the tax policy of Ukraine, which is implemented as a result of changes and additions to the tax legislation. A timely and effective policy is designed to directly influence the stability of the economic activity of business entities, even in conditions of russian aggression. Thanks to a detailed analysis of scientific works devoted to this issue, the definition of «tax incentives» is clarified, its role in the development of economic activity of Ukraine in general and its impact on the financial condition of economic entities in particular is investigated. A number of decisions of the Ukrainian government that contribute to the improvement of tax incentives for economic activity by the state are considered, the advantages and consequences of these decisions for business are determined. It is noted that during the martial law the government introduced laws and regulations that significantly reduce the tax burden on business entities. However, it is also necessary to pay attention to the temporary nature of these measures due to their unprofitability in terms of state budget formation. These measures were introduced by the government solely for the purpose of supporting and sustainable development of the economy. The author also singled out those legal acts that directly relate to tax incentives and were adopted or underwent significant changes during the full-scale Ukrainian-Russian war. In particular, the advantages, disadvantages and consequences of innovations in tax legislation for both business and the country are presented. Also, the tax benefits specified in the updated legal acts and related to the single tax payers in terms of its accrual were assessed. The advantages of the simplified taxation system for single tax payers of the third group, as well as the conditions for the transition of business entities from the general to the simplified taxation system are considered. The peculiarities of the activities of the subjects of this group, some restrictions, as well as the nuances of the transition are emphasized. The peculiarities of payment of land tax and rent on land owned by the state or municipalities were established. It is noted that currently the environmental tax, tax and real estate other than land have been abolished, if the objects subject to taxation are located in the zone of active hostilities and in the territories that were returned during the counter-offensive of the Armed Forces of Ukraine, as well as in the temporarily occupied territories. Keywords: tax revenues, business entities, economic activity, taxes, tax legislation, martial law.

Environmental Taxation: Role in Promotion of the Pro-Environmental Behaviour

The purpose of the article is to investigate the potential of environmental taxation in the regulation of ecological responsibility and ensuring the pro-environmental behaviour of economic entities. To study the theoretical basis of environmental taxation and environmentally responsible behaviour, a bibliometric analysis of key words in scientific articles published on this topic was conducted. The results of the bibliometric analysis show that aspects of environmentally responsible behaviour are presented in the list of keywords that mediate the study of environmental taxation. Thus, pro-environmental behaviour is defined by the necessity of health risks avoiding, clean energy technology providing, waste generating reducing etc. The impact of environmental taxes on various aspects of environmentally responsible behaviour was modelled on the sample of six European countries (Belgium, France, Austria; Finland and Denmark) for 1994-2019. The results of the calculations show that environmental taxes have limited effectiveness in regulating various aspects of environmental liability. So, the average growth of environmental taxes revenue by 1 USD million provides a decrease in the Eco-Innovation Index by 0.001 point; the slow rise in CO2 emissions (less than 0.000 %) and the growth in tobacco use (about 0.000 %). On the other hand, environmental taxes do not influence the country’s environmental performance, as well as on the total alcohol consumption and renewable electricity consumption and output. Thus, an approach to the establishment of tax benefits for enterprises was proposed, considering the results of changes in the environmentally harmful effects they produce.

Особенности оценки профессиональных рисков на малых предприятиях

Due to their economic and productive instability, the small businesses very rarely become the objects of control by the state inspection services, in particular, in the field of ensuring occupational safety. Newly created enterprises are provided by the state with tax benefits and other types of state preferences aimed at support and development. Under various government programs, small businesses can be exempted from any inspections for up to three years. At the same time, due to concessions, the occupational safety system in these enterprises often suffers, such a superior attitude can lead to the following consequences: complete lack of understanding and responsibility for occupational safety in their organization; getting used to and subsequently ignoring the rules of occupational health and safety; gaps in knowledge in matters of ensuring the safety of their employees; increasing risks to the life and health of the employees. The authors of the article came to the conclusion that in order to eradicate the above consequences, one should start with the latter, namely, the study of risks for employees in small enterprises. The purpose of the article is to analyze the existing methods for assessing production risks for the life and health of employees and their application in small businesses entities. It is determined that the risk assessment system has improved in recent years. A large number of different methodologies and methods of risk analysis was developed and practically proven, but at the same time it was found that their use in small enterprises due to their characteristics is not always possible. As a result, a methodology was recommended for assessing production risk in the small enterprises synthesized based on other methods. This methodology considers the quantitative indicators of dangerous actions, hazardous working conditions and their ratio to the number of implemented events based on the severity of the harm caused to health. The proposed risk analysis methodology was practically tested in several small enterprises with various types of activities and confirmed its efficiency.

Legal regulation of tax benefits in the taxation of income of individuals transactions with digital rights (cryptocurrencies)

The author discusses the features of the legal regulation of tax benefits in the taxation of transactions of individuals with digital rights in the Russian Federation. As a result of the study, the author identified a gap in the legal regulation of taxation of digital rights in the Russian Federation, when determining the system of tax benefits for transactions with digital rights. It is necessary to highlight the features of the legal regulation of taxation of income of individuals on transactions with digital rights and determine whether these features are applicable to the legal regulation of taxation of income of individuals on transactions with digital rights in the Russian Federation. The problem is that in the legislation of the Russian Federation there is no legal regulation of taxation of income of individuals on transactions with digital rights, in particular, tax benefits are not established when calculating the tax base of income on transactions with digital rights. The goal of the study is to investigate the experience of foreign legislation and regulatory legal regulation of the Russian Federation and to identify the problems of legal regulation of taxation of income of individuals on transactions of individuals with digital rights. Previously, research in the field of legal regulation of taxation of income of individuals on transactions with digital rights has not been conducted.

Legal regulation of income taxation of individuals on transactions with digital rights (cryptocurrencies)

The author discusses the features of the legal regulation of taxation of transactions of individuals with digital rights in the Russian Federation. As a result of the study, the author identified a gap in the legal regulation of taxation of digital rights in the Russian Federation, when determining the system of tax benefits for transactions with digital rights. Public relations arising in connection with the turnover of digital rights are regulated by the Civil Code of the Russian Federation, while neither legislation nor law enforcement practice has been defined, the specifics of taxation of income of individuals on transactions with digital rights. In this connection, it is necessary to highlight the features of the legal regulation of taxation of income of individuals on transactions with digital rights and determine whether these features are applicable to the legal regulation of taxation of income of individuals on transactions with digital rights in the Russian Federation. The problem is that in the legislation of the Russian Federation there is no legal regulation of taxation of income of individuals on transactions with digital rights. The goal go the research is to investigate the experience the foreign legislation and regulatory legal regulation of the Russian Federation and to identify the problems of legal regulation of taxation of income of individuals on transactions of individuals with digital rights. Scientific novelty of the research lies in fact that previously, no research has been conducted on the application of tax benefits in the legal regulation of taxation of personal income on transactions with digital rights.

Protection of foreign investments during economic crises.

Foreign investments play a crucial role in overcoming the economic crisis in individual States, especially if such a crisis is systemic in nature, and domestic entities lack resources that could be attracted to the economy. In this case, foreign investment is often the only way to restore the normal development of the socio-economic sphere. At the same time, in crisis situations, foreign investors themselves require special protection, which in this case are exposed not only to commercial risk (such risk is "normal", and no one is responsible to the investor for it), but also to "political" risk (which is usually inextricably linked with economic), if, for example, an economic crisis leads to a revolution, a coup, or simply a tightening of economic policy, within the framework of which enterprises are nationalized, including those created at the expense of foreign investment. The currently existing international legal mechanisms, primarily insurance of "political" risk, do not solve the problem due to the fact that it is difficult for insurance companies to receive compensation from sovereign states by way of subrogation. Thus, the importance of national legislation increases - the norms of which should form the investment attractiveness of the state and give foreign investors confidence in protecting their rights even in a situation of economic crisis, for example, in Russia tax benefits are provided for foreign investors in case of adverse changes in the tax burden (the institute of "tax stability") in accordance with Article 9 of the Federal Law "On foreign investments".

Improvement and Transformation of Companies’ Tax Management Practices

An important process in companys tax management is the formation and optimisation of an accounting policy for tax purposes that can ensure an increase in the mass of tax benefits for an economic entity - a taxpayer. The paper substantiates the relevance and necessity of tax management. The purpose of tax management is to increase the economic efficiency of an economic entity and to ensure the entity is economically and legally secure. Tax management also functions as a tool for the entity's success hence accurate and complete information and methodological support are needed for its execution. The author considers the lower level of tax management the level of taxpayer organisations whose main task is to maintain and increase their financial well-being. The tax legislation of the Russian Federation uses the term accounting policy for tax purposes. The policy acts as a documentary confirmation of the methods chosen by a company to optimise tax payments within the legal framework. The author views the features of the process and procedure for the formation of an accounting tax policy, and in the context of the identified features provides directions for improving the accounting policy document. The gradual expansion of understanding of the meaning and functionality of tax management for a company is also pointed out. The traditional understanding was assumed to be the basis of tax management activity, the search for gaps in tax legislation and their use to the benefit of the company at the operational-tactical level. It is now believed that tax management should be strategic, including cooperation with government agencies in order to change the legal system and to create new exemptions for specific industries and types of enterprises.

Unjustified tax benefit: from the judicial doctrine to the anti-avoidance rule

The article analyzes the concept of judicial doctrine. The characteristic features of this legal phenomenon, which is a source of judicial discretion in tax law enforcement, are highlighted and described. The authors state the fact that there is no legal definition that reveals the concept of judicial doctrine. There is a continuing trend towards the active introduction of various doctrines into law enforcement practice, including the field of taxation. The article pays special attention to the doctrine of unjustified tax benefit, specially developed to identify cases of circumvention of the tax law and was (before the appearance of Article 54.1 in the Tax Code of the Russian Federation in 2017) the general anti-avoidance rule (GAAR) in Russia. Based on the study of relevant judicial practice, the article concludes that arbitration courts do not consider the anti-avoidance rule set out in Article 54.1 of the Tax Code of the Russian Federation, as something new, radically different from the doctrine of unjustified tax benefits, as well as about the emergence of serious difficulties for law enforcement officers in the process of filling the anti-avoidance rule (Article 54.1 of the Tax Code of the Russian Federation) with specific content. The authors pay special attention to the problem of the admissibility of tax reconstruction when applying Article 54.1 of the Tax Code of the Russian Federation, concluding in the end that the courts consider it necessary to apply and apply in practice such a tool as tax reconstruction.

Regional tax benefits and assessment of their effectiveness

Regional tax benefits and assessment of their effectiveness

Employing the houseless as corporate social responsibility

PurposeMany hospitality organizations see the benefits of engaging in corporate social responsibility (CSR), which can take many forms. This study aims to examine one relatively unique form of CSR: hiring individuals experiencing houselessness. This research aimed to investigate the impact of hiring individuals experiencing houselessness on customers’ behavioral intentions, attitudes toward an organization and perceptions of CSR actions.Design/methodology/approachAcross two experiments, this study investigated the impact of employing individuals experiencing houselessness on customers’ perceptions of the employee and organization using organizational legitimacy theory.FindingsResults demonstrate that employees known to be houseless elicited more positive employee and organizational perceptions from the customers, mediated by CSR perceptions. In addition, the gender of the employees or the quality of the organization did not impact these findings.Practical implicationsHospitality and tourism organizations should consider using available resources or tax benefits to make a deliberate effort to employ those experiencing houselessness.Originality/valueUsing organizational legitimacy theory, this study examines CSR perceptions as a potential explanatory mechanism between houselessness and customers’ reactions.

Short-lived story of Mexico’s special economic zones: An anti-corruption cancellation or a political discourse?

This article analyses the cancellation of the 2016 Special Economic Zones (SEZs), a project that sought to increase the economic competitivity of selected territories by attracting foreign direct investments (FDIs) through tax benefits and logistical platform commitments; being abrogated in 2019 and relocated to the 10 SEZs supporting the Trans-Isthmic Railroad in 2021 (TIR-SEZs). The paper discusses that, under the façade of anti-corruption, the current President of Mexico (2018-2024) is continuing neoliberal practices; the same ones he has called to accountability for being prone to corruption. This piece uses the theoretical bases purported by Brabazon’s Neoliberal Legal, the Law & Economics and Law & Development scholarships to assess the presence of neoliberal concepts in both the previous SEZs and the TIR-SEZs’ legal framework.

Frontier Workers’ Tax and Social Security Status in Europe – Optimizing the Legal Status in a Changing Landscape

This report of the European Region of IFA evaluates the tax and social security implications of frontier workers in Europe. The exact meaning and scope of “frontier worker” differ in tax law and social security law. Several relatively old tax treaties contain special tax provisions attuned to the cross-border situation of frontier workers that deviate from the general allocation rules for employment income (article 15 of the OECD Model). The common characteristics of these special treaty provisions of daily return and geographical proximity may lead to unconscious tax biases in a changing landscape of digitalization and globalization. Tax treaties – primarily drafted at a time when physical presence was the most reliable element in determining taxing rights – are not attuned to the increasing flexible forms of frontier work, which have gradually developed and are becoming more prevalent. Enhanced means of communication tools and transportation enabling telework and highly mobile work (e.g. individuals who reside in one state and work in more than one other state), amongst others, have increased the mobility and diversity of frontier work. Frontier workers may also encounter difficulties in equal treatment with obtaining tax and social benefits. Further inconveniences may arise from the deviation of social security rules from tax rules. The key challenges in the legislative framework suggest the need to revise the definition and legal status of frontier workers, especially in the aftermath of the COVID-19 pandemic. Suggestions are made to minimize the detected application and interpretation problems, and to enable a better coordination of tax and social security rules.

Who Benefits From Homeowner Tax Preferences?

This paper relies on estimates from a microsimulation model to analyze the distributional impacts of the preferential tax treatment of owner-occupied housing by race and income. Compared to other homeowner tax advantages, which are more equally distributed than tax burdens, the mortgage interest deduction is more unequally distributed than tax burdens. Although current tax policy is more progressive than a tenure-neutral tax policy that treats homeowners and renters the same, a tenure-neutral tax policy yields larger reductions in after-tax income inequality. Among median-income households, white households receive a larger share of homeownership tax benefits than Black households, relative to each racial group’s share of the overall tax burden. Residential location explains the largest portion of the racial gap in the imputed rent exclusion, while household income explains the largest portion of the racial gap in the mortgage interest deduction and capital gains tax exclusion.

Mediating role of profitability relating financial leverage and stock returns

PurposeThis paper aims to highlight firms' profitability as an alternative channel by which changes in leverage could affect stock returns in an imperfect market setting. The author also analytically argues that the benefits of debt, if any, may accrue beyond the usual tax benefit channel.Design/methodology/approachThe author used multivariate regression models based on firms' characteristics and the models' changes along with a two-stage least-square (2SLS) type procedure to estimate the impact of leverage changes on stock returns. The author controls for the varying arbitrage risk that is measured by forecasted idiosyncratic volatility of stock prices and overcome simultaneous or endogenous determination by using inter-temporal non-synchronous variation in leverage and control variables.FindingsThe author finds that increase in leverage increase (decrease) stock returns for firms with the gross operating profitability higher (lower) than the cost of debt. The author also finds that the variation in arbitrage risk does not substitute for the primary effect of leverage changes on stock returns.Research limitations/implicationsThe author's findings provide tacit support to the recent literature attempting to resolve the empirically puzzling pattern of the negative relationship between profitability and leverage. The findings suggest inclusion of profitability as a crucial asset-pricing factor in the contemporary empirical models.Practical implicationsThe non-trivial role of profitability in determining the effect of leverage on firms' stock returns that may be useful to managers, credit analysts and policy makers to assess the impact of net profitability on any change in leverage and its ensuing consequences on firms' value.Originality/valueThe paper develops analytical insights into the marginal role of profitability in influencing the relationship between firms' financing decisions and firms' stock returns beyond the conventional mechanisms of tax benefits, bankruptcy costs and information asymmetry.

Alleviating Financial Hardships Associated with High-Deductible Health Plans for Adults with Chronic Conditions Through Health Savings Accounts.

High-deductible health plans (HDHPs) are becoming increasingly common, but their financial implications for enrollees with and without chronic conditions and the mitigating effects of health savings accounts (HSAs) are relatively unknown. Our aim was to compare financial hardship between non-HDHPs and HDHPs with and without HSAs, stratified by enrollees' number of chronic conditions. We used data from 2015 to 2018 Medical Expenditure Panels Surveys (MEPS) to compare rates of financial hardship across individuals with HDHPs and non-HDHPs using linear and logistic regression models. A nationally representative sample of 30,981 adults aged 18-64 enrolled in HDHPs and non-HDHPs. We examined several measures of financial hardship, including total yearly out-of-pocket medical spending as well as rates of delaying medical care or prescriptions in the past year due to cost, forgoing medical care or prescriptions in the past year due to cost, paying medical bills over time, or having problems paying medical bills. We compared rates using the non-HDHP as the control. On most measures, HDHPs are associated with greater financial hardship compared to non-HDHPs, including average annual out-of-pocket spending of $637 for non-HDHPs, $939 for HDHPs with HSAs, and $825 for HDHPs without HSAs (p < 0.01). However, for HDHP enrollees with multiple chronic conditions, having an HSA was associated with less financial hardship (p < 0.05). Our findings suggest that HSAs may be most beneficial for those with chronic conditions, in part due to the tax benefits they offer as well as the fact that those with chronic conditions are more likely to take advantage of their HSAs than their younger, healthier counterparts. However, as HDHPs are more likely to be correlated with worse financial outcomes regardless of health status, recent trends of increasing participation may be a reason for concern.

REAL ESTATE TAX COMPARISON OF THE BALTIC STATES

Real estate tax is the only tax that is 100 % amount is transferred to the municipal basic budget. The aim of the study is to analyze the calculation of real estate tax and the application of benefits procedures in the Baltic States and to compare them. Novelty of the research: the author compared the real estate tax in the Baltic States, performed an assessment of rates, taxable bases and benefits. The criteria for determining the real estate tax - the tax base, rate and benefits differ significantly in Latvia, Lithuania and Estonia. The name of this tax is different in the Baltic States, because there is not only a real estate tax, but also a land tax. The tax base can be both cadastral value and market value. Comparing Latvia with Lithuania and Estonia, real estate tax in Latvia is the highest in relation to the average gross salary.

Направления трансформации налоговой политики в целях обеспечения поддержки и стимулирования инновационного развития экономики

Restrictions on the growth of the Russian economy caused by external geopo-litical factors necessitate the search for new development resources, including tools for indirect support of industry. The subject of the study is a system of tax measures, primarily tax benefits and preferences, adapted to the needs of inno-vative economic development and contributing to stimulating demand for in-novative products. The purpose of the work is to identify the elements of tax policy that need to be adjusted, to search for ways to eliminate the identified shortcomings. It is established that the current tax benefits are mainly general in nature in the presence of some territorial restrictions and do not take into account the sectoral and innovative components of tax policy. Proposals are formulated to clarify the existing tax benefits that contribute to attracting high-ly qualified specialists in the field of research and development; stimulating the consumption of innovative products, increasing the volume of financing of na-tional projects, increasing the role of regions in creating a favorable investment environment through the implementation of interregional projects in priority sectors on the basis of a coordinated regional tax policy. The conclusion is made about the expediency of the transformation of tax policy in terms of the application of tax preferences aimed at stimulating the innovative component of the activities of economic entities.

ESG-повестка и агрессивное налоговое планирование

The analysis of the current state of the balance of interests of the state and organizations in the field of achieving the goals set within the framework of the ESG strategy in the jurisdictions of economically developed countries is of urgent importance for the domestic practice of interaction between organizations and tax authorities to achieve sustainable development goals. It is especially important to assess the negative trends of abuse of the ESG agenda for aggressive tax planning. The subject of the study is the mechanisms of ESG activity of organizations in relation to the tax motivation for obtaining tax benefits. The purpose of the work is to put forward proposals to improve the effectiveness of detecting illegal tax optimization. It is concluded that there is a significant relationship between the declaration of ESG goals by organizations and the methods of aggressive tax planning used by them to extract unjustified tax benefits with an emphasis on environmental ESG aspects. The conclusions made in the study are consistent with the results of the work of foreign scientists over the past five years. At the same time, there is a real prospect of confirming economic and statistical studies within the framework of the hypothesis put forward in the study for domestic organizations in terms of the tax benefits they receive from participating in ESG activity.

МЕТОДИЧНІ АСПЕКТИ ОРГАНІЗАЦІЇ ЛІЗИНГОВИХ ОПЕРАЦІЙ У ЗОВНІШНЬОЕКОНОМІЧНІЙ ДІЯЛЬНОСТІ ПІДПРИЄМСТВА

The modern development of international business creates new conditions for the effective functioning of business entities on international markets. First of all, this concerns the constant and steady increase in the volume of financing of foreign economic operations, which, in turn, requires the search for optimal methods and sources, among which leasing occupies a significant place. In Ukraine, the urgency of the development of leasing is determined by the need for technical re-equipment and renewal of the fixed assets of enterprises, the level of wear and tear of which is approximately 80%. The vast majority of Ukrainian enterprises are unable to carry out technical renewal of production with their own funds. Therefore, there is an objective need to develop the leasing business. The article analyzes the current trends of the global leasing market and the market of Ukraine, identifies problems and prospects for development, develops recommendations for improving the methodical support of the organization of leasing operations in the field of foreign economic activity. The historical experience of the development of leasing in many countries confirms its important role in the renewal of production, the expansion of product sales, and the activation of investment activities. Leasing can become especially attractive in connection with the introduction of tax and depreciation benefits. Leasing can become especially attractive in connection with the introduction of tax and depreciation benefits. Leasing operations are in great demand on the world market, as they provide certain advantages for all participants in the agreement. Today, Ukrainian leasing companies are unable to fully meet the aggregate demand for this type of financial services, therefore, for Ukraine, the use of international leasing as the main element of updating equipment and production facilities is extremely important. International financial leasing provides enterprises with the opportunity to modernize equipment and thereby increase their efficiency and competitiveness. Therefore, the relevance of the study is determined by the need to use international financial leasing as a means of updating the company's main production assets.