Tax Bonus Research Articles

A Test of the Permanent Income Hypothesis When Households are Less Constrained

AbstractIn 2009, the Australian Government delivered approximately $8 billion in direct payments to households. These payments were randomly allocated over a 5‐week period. Panel model estimates show that for the average household, there was no significant disbursement effect on nondurable consumption. Only for relatively young and low‐income households, for example, at the bottom 10th percentile of each, was there a significant positive effect of the tax bonus payment on nondurable consumption. We argue the null findings on average could be due to macroeconomic and institutional differences leaving Australian households less constrained than their U.S. counterparts.

Legal Regulation of the Professional Income Tax in Russia

The paper is devoted to the analysis of issues related to the legal regulation of the professional income tax in Russia also often referred to as the self-employed tax. It is noted that one of the problems of the current legislation is the lack of a legally fixed concept of the self-employed. Based on the conducted research, it is concluded that the professional income tax is the only special tax regime that can be applied by individuals who are not individual entrepreneurs. The peculiarity of the professional income tax is manifested in the presence of such optional elements of the legal structure as an authorized entity (an operator of an electronic platform and (or) a credit institution), a digital subsystem (My Tax mobile application), and a special type of tax benefits — a tax bonus. In addition, within the framework of the special tax regime under consideration, the legal status of the tax authority is being transformed: part of the rights and obligations of the taxpayer is delegated to it, in particular, the right to send an order to the bank to write off and transfer funds from the taxpayer’s bank account to pay tax, as well as the right to reduce the amount of tax due by the tax bonus.

THE EFFECT OF TAX MINIMIZATION, BONUS MECHANISM, FOREIGN OWNERSHIP, EXCHANGE RATE, AUDIT QUALITY ON TRANSFER PRICING DECISIONS

Abstract
 The purpose of this study was to determine the effect of tax minimization, bonus mechanisms, foreign ownership, exchange rates, and audit quality on transfer pricing in manufacturing companies in Indonesia. The population of this research was all manufacturing companies listed on the Indonesia Stock Exchange from 2017 to 2019. By using the purposive sampling method, 81 companies were selected as the research sample. Based on logistic regression analysis, it was proven that the tax minimization variable has a significant positive effect on transfer pricing decisions. Likewise, the audit quality variable is proven to have a significant negative effect on transfer pricing decisions in manufacturing companies in Indonesia. Meanwhile, the bonus mechanism, foreign ownership, and exchange rate variables were not proven to have a significant effect on the company's transfer pricing decision. These results indicated that the greater the tax minimization carried out by the company and the lower the audit quality will increase the probability of the company in conducting transfer pricing, and vice versa. The results of this study have implications for encouraging the government to make regulations that can prevent transfer pricing practices between companies that have a special relationship that might harm the government from tax revenue.
 Keywords: bonus mechanism; foreign ownership; tax minimization; transfer pricing

Determinants of transfer pricing decision at manufacturing companies of Indonesia

This paper examines the effect of tax avoidance, bonus mechanism, debt covenant, tunneling incentive, audit quality, multinationality, foreign ownership, and company size on transfer pricing. This research population is all manufacturing companies that list at Indonesia Stock Exchange on the period of 2016-2018 but the collected data are on a period of 2015-2019. The sampling technique uses a purposive method to obtain 275 samples in the observation period of 2016-2018. The method of this research involves descriptive statistic test, classical assumption test, and hypothesis test. A regression test is used for testing the hypotheses. The result of the research shows that tax avoidance, debt covenant, and company size have a significant effect on transfer pricing decision. The factors are multinationality, foreign ownership and audit quality also have a significant effect on transfer pricing decisions. Meanwhile, bonus mechanism and tunneling incentives do not significantly affect transfer pricing decisions. Conclusions from this research is a lot of factors involved in the transfer pricing decision. One from inside the company and the others from an outside company. Transfer pricing is a tool to achieve certain goals. The purpose of transfer pricing can be categorized as internal goals and external goals. The manufacturing companies when deciding about transfer pricing must be careful because there are two perceptive about transfer pricing. One perceptive from a business that transfer pricing is something useful because a company can save money related tax but the other perceptive from the government side, transfer pricing has believed to be able to have reduced or even disappearing potential for a country’s tax revenue.

Comparison of tax bonus as a tool of tax benefit for taxpayers in V4 countries and Austria

Research background: Tax legislation provides taxpayers some advantages which enable them to reduce their tax base in the tax statement. The amount of the tax advantage varies depending on the state and also the tax policy of the country. The tax bonus is one of the benefits, which can affect the amount of net income of taxpayers. The state’s efforts to mitigate the effects of covid-19 are currently even greater in order to sustain the functioning operations of taxpayers and at the same time to start the growth of economies again. All countries neighbouring Slovakia provide tax bonuses in certain amounts or other benefits for supporting families. The issue of tax bonuses is not given much attention by authors in the Slovak Republic or at the international level. So far, there is no article that deals with a comprehensive comparison of the tax bonus in several countries. Purpose of the article: The aim of this paper is to present and characterize the tax benefits provided to taxpayers by the tax legislation of the Slovak Republic and subsequent comparison with similar tax benefits provided by the Visegrad countries and neighbouring Austria. Methods: The method used the most in the paper are analysis and comparison. Findings & Value added: The contribution of this article is a comprehensive overview and comparison of the rules for the application of the tax bonus among the V4 countries and Austria and an evaluation of the most advantageous system among these countries in 2021.

The role of profitability in moderating the factors affecting transfer pricing

This study aims to analyze the influence of tax expense, bonus mechanism, and incentive tunneling on transfer pricing with profitability as moderating. The population is mining companies listed on the Indonesia Stock Exchange in 2016-2019. The sample selection used a purposive sampling technique and obtained 45 analysis units. Data analysis method used moderated regression analysis (MRA). The study showed that tunneling incentive had a significant positive on transfer pricing decision. Tax expense and bonus mechanism had no significant effect on transfer pricing decisions. Profitability strengthened the effect of tax expense on transfer pricing decisions. However, profitability was unable to moderate the influence of bonus mechanism and tunneling incentive towards on transfer pricing decisions. The conclusions are that shareholders the majority of a controlled by the foreign shown to improve the transfer pricing decision. An increase in profitability followed the transfer pricing decision high to reduce tax expense in the company.

Comparison of housing financing products in SR

Research background: The paper describes the comparison and subsequent analysis of products for housing finance in the Slovak Republic through the use of financial resources from banks and savings companies. The development and boom of the real estate market in Slovakia was mainly due to new forms of financing, such as mortgage loans. At present, there are various combinations of credit products on the market with favorable declining interest rates, but also support from the state in the form tax bonus on paid interests or state premium for contractual savings for housing. The development of housing loans also has a significant impact on the Slovak economy. Rising household indebtedness is a problem beyond the financial sector. Purpose of the article: Over-indebted households may have difficulty repaying loans in bad times or their consumption significantly reduce, which will exacerbate the process of resuming economic growth. The consequences of rising household indebtedness therefore need to be addressed from a wider perspective, including its economic-social impacts. The fundamental purpose of the article is to analyze the current possibilities of housing financing in the Slovak Republic and determine the most appropriate form. Methods: In order to fulfill our stated goal, we apply a method of comparison, analysis and synthesis. Findings & Value added: Finally, we formulate our own view of which form of financing housing is the most suitable based on the examined parameters.

Analytic Hierarchy Process in Czech Taxpayers’ Decision-Making Regarding their Tax Liability

The article deals with taxation of the earned income of natural persons in the Czech Republic in 1993–2017. The goal is to select the year when the tax burden on the earned income of natural persons was the lowest depending on the taxpayers’ preferences, their income level and the number of tax deductions they were entitled to. Based on their income levels, taxpayers analyzed the elements constituting their tax liability and decided whether it became smaller or larger in the given periods. The research methodology includes methods of description, comparison, analysis and synthesis and methods of multi-criteria decision-making. The decision-making analysis focuses on model situations which differ from each other in terms of the amount of gross wage and the number of deductions applied. It is concluded that in most cases, the replacement of the progressive tax rate by the linear rate in 2008 lead to a reduction in the tax burden. The highest decrease of tax liability was observed among taxpayers with below-average incomes. Taxpayers with above-average incomes were subject to a higher tax liability when the nominal tax rate was progressive. Tax credit is yet another factor that influences tax liability; for taxpayers whose income is less than average it takes a form of tax bonus. The most significant change in the legislation regulating income taxation occurred between 2007 and 2008. According to the evaluated criteria weights, the most import criterion for Czech taxpayers is the effective tax rate. The weights of criteria in multi-criteria decision-making analysis were established by using the results of the questionnaire survey conducted by the author among 189 respondents at a manufacturing company in Zlin region. For citation Krajňak M. Analytic Hierarchy Process in Czech Taxpayers’ Decision-Making Regarding their Tax Liability. Journal of Tax Reform. 2020;6(2):142–156. DOI: 10.15826/jtr.2020.6.2.079. Article info Received May 8, 2020; Revised May 22, 2020; Accepted June 2, 2020

ANALISIS FAKTOR-FAKTOR YANG MEMPENGARUHI KEPUTUSAN TRANSFER PRICING PERUSAHAAN MANUFAKTUR DI BURSA EFEK INDONESIA (BEI) PERIODE TAHUN 2011-2014

He purpose of this study was to examine the effect of taxes, bonus scheme, and foreign ownership in the transfer pricing decisions on manufacturing companies in Indonesia Stock Exchange in 2011-2014. Transfer pricing is defined as a special sale price that is used in exchange of interdivisional to record the revenue division division seller and buyer costs. The data used in this study is a secondary archival data. Data obtained from the manufacturing company's annual reports (2011-2014) sourced from www.idx.co.id. The hypothesis in this study were tested using binary logistic regression analysis. The population in this study were 130 companies listed on the Stock Exchange in 2011-2014. Based on purposive sampling method, samples obtained as many as 33 companies.The results of data processing can be concluded as follows: there is the influence of variable tax bonus scheme, and foreign ownership in the variable transfer pricing with the value of coefficient of determination of 18.4% which reflects the variation of tax bonus scheme, and foreign ownership in influencing the decision of transfer pricing. The tax effects and bonus scheme was also statistically significant influence transfer pricing, with a significance level of each of 0.035 and 0.046 were less than 0.05. Foreign ownership in the variable does not significantly affect the transfer pricing decisions with significant value for 0.437 is well above 0.05. The findings provide an opportunity for further research to examine the effect of any other variable of the transfer pricing decisions.

Inequality and the marriage gap

Marriage is one of the most important determinants of economic prosperity, yet most existing theories of inequality ignore the role of the family. This paper documents that the distributions of earnings and wealth are highly concentrated, even when disaggregated into single and married households. At the same time, there is a large marriage gap: married people earn on average 26 percent more income, and they hold 35 percent more net worth. To account for these facts, I develop a general equilibrium model where females and males face uninsurable income risk and make decisions on consumption-savings, labor supply and marriage formation. In a calibrated version of the model, I show that selection into marriage based on productive characteristics, an effective tax bonus for married couples, and stronger bequest motives for households with descendants are key to accounting for the marriage gap in earnings and wealth. A policy experiment of moving from joint tax filing for married couples to separate filing yields output gains and more marital sorting.

The elasticity of personal income: evidence from survey data

This paper uses income survey and tax burden data for Italy, in order to estimate the elasticity of personal income to taxation. The estimated elasticity is lower with a broad definition of personal income. Given the current tax structure and the system of tax expenditures, income shifting and tax avoidance behaviour are an important determinant of the personal income tax base. The estimated regression models also show, that labour market developments have contributed to decrease inequality in the 2000–2012 sample period. The elasticity estimates are employed to simulate the effects of the “80 euro tax bonus”.

Household Spending Out of a Tax Rebate: Italian '€80 Tax Bonus'

Household Spending Out of a Tax Rebate: Italian '€80 Tax Bonus'

Household Spending Out of a Tax Rebate: Italian ''80 Tax Bonus'

We estimate the consumption response of Italian households to the “€80 tax bonus” introduced in 2014, using the panel component on the Survey of Household Income and Wealth. We find that households that received the tax rebate increased their monthly consumption of food and means of transportation by about €20 and €30, respectively, about 50-60 per cent of the total bonus. There was a larger increase for households with low liquid wealth or low income. Our estimates are quite robust to different model specifications and are broadly in line with the evidence available from similar tax rebates in other countries but, due to the small sample size, are not always statistically significant. To understand the mechanism behind our results we then simulate an overlapping generations model of household consumption: the marginal propensity to consume generated by the structural model is in line with our empirical estimates. JEL Classification: D12, E21

Vývoj redistribuce v České republice v období 2004-2014

Cilem přispěvku je zjistit, jak v Ceske republice daňově-davkový system působil mezi roky 2004 a 2014 na rozděleni přijmů ve spolecnosti. Analýza byla provedena srovnanim Lorenzových křivek, Gini koeficientu a indexu efektivni progresivity, ktere byly urceny pro různe přijmove situace po působeni daně, pojistneho a socialnich přijmů. Nastaveni daňově-davkoveho systemu působilo progresivně na rozloženi přijmů domacnosti. Progresivita vykazovala konstantni hodnoty. Dlouhodobě jsou z tohoto pohledu nejdůležitějsim nastrojem socialni přijmy (důchody a davky statni socialni podpory) a zdaněni, u něhož lze považovat za progresivni faktor možnost daňoveho bonusu.

Application of Tax Bonus Under the Slovak and Czech Republic

Abstract This paper deals with the issue of practical application of tax bonus. It answers basic questions related to tax bonus and to a taxable party entitled to it under the valid legislation of the Slovak and Czech Republic.

Lessons from the recent economic crisis: the Australian household stimulus package

This paper provides an impact evaluation analysis of the 2009 Australian Household Stimulus Package, which was composed by three main cash payments: the Back to School Bonus, the Single Income Family Bonus and the Tax Bonus for Working Australians. Using panel data from the 2008 and 2009 HILDA surveys, the results show that these cash payments reduced the risk of poverty and stimulated consumption expenditure. Nonetheless, only the Back to School Bonus and the Single Income Family Bonus were really important in achieving these goals, while the Tax Bonus for Working Australians did not contribute to stimulate consumption and failed to reduce the risk of poverty. Thus, the analysis confirms the crucial role of governments to protect the most vulnerable groups avoiding a dramatic deterioration of social outcomes and favoring a fast economic recovery when interventions are timely and well-targeted.

Does Ricardian equivalence hold in Australia? A revision based on testing super exogeneity with impulse-indicator saturation

Following the 2008–2009 Global Financial Crisis, many countries, including Australia, enacted fiscal stimulus packages in the hope of reviving their economies by encouraging aggregate demand. For the success of these efforts, it is vital that fiscal policies have some positive impact on the real economy. However, tax reductions and cash handouts are virtually ineffective if consumers are Ricardian and internalise the intertemporal budget constraint of the government. This paper aims to test the Ricardian equivalence hypothesis for Australia from 1960 to 2011 by exploiting the links between (1) Ricardian equivalence and the Lucas critique; (2) the Lucas critique and super exogeneity, and (3) testing for super exogeneity with impulse-indicator saturation. As there is no evidence of a structural break in the conditional model for the growth rate of per capita real gross domestic savings, we conclude that policy-regime shifts did not lead to substantial changes in the estimated relationship, so the Lucas critique does not apply. Consequently, our results indicate that during the past half-century Ricardian equivalence held in Australia. This implies that tax and cash bonuses of the government may not lead to the desired economic outcomes as Ricardian-type consumers tend to offset the dissaving of the government by saving more and leaving household consumption unchanged.

Evaluation of property tax bonus to promote solar thermal systems in Andalusia (Spain)

This paper evaluates the effects of a property tax bonus to promote the installation of solar–thermal energy systems in buildings in Andalusia (southern Spain). The propensity score matching methodology is used. The treatment group consists of municipalities of Andalusia that established property tax bonuses in their municipalities in 2010. The control group consists of municipalities that did not. The response variable measures the number of new square meters of solar thermal systems installed in 2010. The analysis leads to the conclusion that municipalities that established a property tax bonus had installed, on average, 102.245 to 122.389 square meters more. These results indicate that the percentage increase in squares meters installed in municipalities which adopted the tax bonus promotion ranged from 70.74% to 98.38%. These percentages were lower for rural municipalities (49.00% to 77.06%).

Family policy in the Czech Republic: Redistribution of wealth through the child tax bonus

Families with children are traditionally the target group of the social system in developed countries. This paper deals with one component of family policy in the Czech Republic, which is household entitlement. The main focus is on the child tax bonus (hereafter CTB). The paper is divided into descriptive and methodological-analytical parts. The descriptive section provides basic information about the beneficiaries of CTB. In the latter section we formulate research questions about the impacts and effects of CTB. We discover that the influence of tax instruments has grown in recent years. The amount of the tax bonus for children exceeded CZK 3 billion in 2009, with almost 22% of all households with children eligible. Although CTB is income-tested, its redistributive impact is rather small – approximately 80% of recipients cannot be considered as poor. Outcomes from our microsimulation model reveal that 82 to 86% households with CTB were at the same time modelled as eligible and therefore we can use microsimulation techniques for future analyses of policy change.

MOŽNOSTI VLIVU DAŇOVÉ A DOTAČNÍ POLITIKY STÁTU NA SNÍŽENÍ NEZAMĚSTNANOSTI V ČESKÉ REPUBLICE

The article deals on unemployment in the context of social, tax and evacuating. Unemployment is a global economic, social and psychological problem, whose growth is closely linked with the economic crisis. Approach to solving unemployment is different between countries. In the Czech Republic, moreover, due to the relative generosity of the welfare system pushes the unwillingness of some of the unemployed to work. Aim of this article is to design economic incentives to motivate the unemployed to employment or operation of self-employment, such as cutting and editing insurance and social change in the tax on personal income by introducing a tax bonus for the taxpayer.