Context Of Tax Research Articles

Terminological support for the systematicity of tax regulation as a basis for achieving a balance of interests of participants in tax relations in Ukraine

The relevance of the research topic is backed by the fact that the current tax legislation and other industrylegislation bordering on tax regulation cannot be defined as a systemic, coordinated framework. There arefundamental differences both between certain legislative acts and between certain legislative norms withinone act. The relevance is further forced by the fact that the respective influence on achieving systematic taxlegislation is yet to be taken into account considering the provisions of the Law of Ukraine "On Policy-Making Activities". The purpose of the article is to analyze the terminological aspects that express thecontent of tax regulation, which is carried out in view of the systemic criteria for composition of tax law. Theresearch applies methods of scientific knowledge that specify the problematic nature of the consideration ofissues, namely the systematic method (through which the systematicity of tax law and the systematicity of taxlegislation is investigated), comparative (through which a comparative analysis of the development dynamicsand changes in legislative norms is carried out), prognostic (through which the conclusions regarding theprospects for changing the tax legislation system are made). The comparative nature of the system of both taxlaw and tax legislation is researched. The tax glossary is characterized through the possibilities andconsequences of formulating a stable construction of definitions that expressly ensure tax regulation. Theanalysis of the raised issues is carried out through determining a number of aspects based on the assessmentof the norms of the Law of Ukraine "On Policy-Making Activities". The classification of laws in the context oftax regulation is provided. The system of legislative impact is based on the consistency of the relevant rulesfrom a constitutional norm to a norm of a bylaw . Emphasis is placed on two original constitutionalconstructs (Articles 67, 92 of the Constitution of Ukraine), which are further specified in the relevant taxlegislation. On the basis of the conducted research, conclusions and recommendations were developed that aclear consideration of a particular balance of norms contributes to the elimination of gaps and conflicts intax regulation. Achieving a balance of interests of the participants in tax relations cannot occur in case ofsystematic ignoring and violation of policy-making procedures. Article 4 of the Tax Code of Ukraineestablishes unanimous requirements regarding the stability of tax legislation, the objective necessity of acertain period of delay between the moment of adoption of a legislative norm and its entry into force.

Article: Anti-Avoidance Jurisprudence in Direct Taxation: The CJEU Between Politics and Certainty

Over a span of several years, the Court of Justice of the European Union (CJEU) developed a framework for anti-abuse in the context of European law and particularly established criteria for justifying restrictions on the fundamental freedoms in the tax context. In tax cases on anti-avoidance that are more recent, however, the court has demonstrated a notable change in its stance towards this issue that represents a disruption in the consistent development of its jurisprudence on abuse. While the court covers the contradictions in its case law by passing an impression of continuity between disparate decisions, it is remarkable how recent rulings draw from Organisation for Economic Co-operation and Development (OECD) language. This reliance on concepts from a non-EU institution, however, leads to legitimacy concerns. The increasing importance of international organizations and public opinion – for example, in reaction to the Panama Papers – in shaping the international tax landscape is undeniable. While high-profile projects like Base Erosion and Profit Shifting (BEPS) and Global Anti-Base Erosion (GloBE) highlight international tax issues, they also exert political pressure on judicial bodies such as the CJEU which leads to less methodological decisions that will align the court with political interests. In this context, the CJEU’s acting as a political player at the borderline of its competences is to be viewed critically, especially regarding the recent shift in its case law on abuse and tax avoidance that leads to concerns over legal certainty. Anti-abuse principle, anti-avoidance jurisprudence, CJEU, international organizations, international taxation, legal certainty, legitimacy, political influence

Polish Concession Fee on Offshore Wind Farms: A Quasi-Tax Hidden in the Energy Law

The production of electricity using offshore wind farms is at a preparatory stage in Poland. However, it has the opportunity to become the most dynamically-developing segment of the power industry, especially considering ambitious targets for reducing CO2 emissions. The development of the renewable energy sector in Poland has major real estate tax context when one takes into account that RET paid for the infrastructure projects constitutes an important source of tax revenue for the local communities. The taxation of wind farms is a well-recognised issue, but jurisprudence developed in this area cannot help in solving the problem of the taxation of the offshore wind farms. A legal loophole in the Polish RET provisions made it impossible to tax the offshore constructions. In order to capture the tax from offshore wind farms, the Polish legislator introduced a special concession fee, whose amount is approx. equal to the hypothetical RET to be paid from the wind farm if it was located onshore. The purpose of the article is to present the doubts regarding the offshore concession fee from the perspective of Polish constitutional standards as well as the Polish tax system consistency.

Coordinating social equity and emissions: Challenges in carbon tax policy

This study addresses the challenging trade-off between maximizing environmental benefits and ensuring social fairness in a domestic carbon tax context. Focusing on France, where the pathway to decarbonization has faced public opposition, we explore four redistribution policies to reverse the regressive effect of a €100/t of CO2e carbon tax. While the homogeneous redistribution scheme reaches progressivity, its social and environmental implications are not without issues. A substantial portion of the emissions reduction achieved by the carbon tax dissipates due to increased emissions from overcompensated households. Additionally, the compensation generates higher tax burden inequality within and between income groups. Three tailored scenarios are designed to overcome misguided redistribution and maintain the social objective: a vertical scenario targeting financially constrained households, a horizontal scenario focusing on vulnerable households, and a mixed scenario considering both aspects. The vertical scenario efficiently reduces tax burden dispersion among the most affected households, limiting post-redistribution emissions (a mere 0.65% increase) and proving cost-effective for the government. While the horizontal scenario requires a larger share of tax revenue, it successfully reduces overall tax burden dispersion without increasing emissions. Compared to the previous scenario, the mixed scenario falls short in reducing tax burden inequality but exhibits promise in limiting greenhouse gas emissions.

Research on the Settlement of Land Value Added Tax in J Real Estate Company

In recent years, with the recovery of the real estate market economy, China's housing prices have been consistently high, partly due to the impact of supply and demand, and partly due to the high tax costs of real estate in China. When it comes to the cost of real estate tax in our country, we have to mention the tax type that accounts for a large proportion: land value-added tax. The collection of land value-added tax in China adopts a "liquidation system". However, due to certain deficiencies in the land value-added tax system and incomplete related systems, complex collection methods for land value-added tax liquidation, unclear tax elements, and great difficulty, the internal management of real estate enterprises often cannot fully grasp the key points and difficulties of land value-added tax liquidation, which greatly increases the risk of land value-added tax involvement in real estate enterprises. On the basis of clarifying the development context of land value-added tax, combined with the actual situation of land value-added tax liquidation of J Real Estate Company and the analysis of the land value-added tax liquidation process, it is found that the problems of J Real Estate Company include lack of attention to land value-added tax liquidation, lack of financial daily management, and insufficient utilization of land value-added tax liquidation benefits. Through summarizing and researching relevant issues, it is proposed that J Real Estate Company should always pay attention to policy changes, place financial and tax personnel at the forefront of project development, and strengthen daily financial management. On the basis of studying the theory of land value-added tax liquidation and combining with practical liquidation cases, this article considers and studies how Chinese real estate enterprises should respond to the tax risks of land value-added tax. The aim is to encourage Chinese real estate enterprises to actively explore strategies to improve their ability to resist tax risks and methods to enhance their internal management capabilities of land value-added tax, help real estate enterprises control tax costs, and ultimately promote the healthy and rapid development of real estate enterprises.

In search for useful understanding of the term “privacy” for tax matters

The terminology issue regarding the concept of “privacy” seems to be increasingly important in the context of the changing tax reality in which the emphasis is put even more strongly than before on the protection of fiscal interest, at the expense of limiting the sphere of taxpayers' privacy, in particular through the expansion of their surveillance on an unprecedented scale. The OECD, in its notable achievements, treats the taxpayer's right to privacy very superficially. In one of the documents, which is a kind of report on the rights and obligations of taxpayers in force in individual countries, we can read that “All taxpayers have the right to expect that the tax authorities will not intrude unnecessarily upon their privacy”. I would argue that this statement is far not enough in the reality of current technological possibilities and realizes too narrow protection of taxpayer’s right. The issue of taxpayers’ right to privacy should be introduced to public and scientific awareness. But how should the term privacy itself be understood? The answer is not easy, one the term is not precise so understanding is difficult though the literature on this issue is very broad. Two it is rarely used on the ground of debate on taxation. The critical approach has led to a review of the immensely rich body of literature on the theory of privacy and the right to privacy, and an attempt to adopt an understanding of the term “privacy” that will also be useful in tax matters. There is the absence of a consensus on the adoption of a particular way of defining “privacy”. For that reason it has to be emphasized that there is no theoretical basis to conduct a discussion on this specific taxpayer right, which is right to privacy. This paper is an attempt to find such understanding of the term "privacy" that will be useful in tax context.

Rewards and Fear of Being Labeled as Racist: A Tax Fraud Whistleblowing Investigation*

ABSTRACTThis article investigates experimentally, in the income tax context, how whistleblowing intentions are influenced when a tax fraud perpetrator is of a different race than a potential whistleblower. In particular, it examines the impact of a message highlighting the social value of whistleblowing and how fear of being perceived as racist influences whistleblowing decision‐making. Using insights from the fear elicitation and processing literature, we find that a potential whistleblower from a majority racial group who learns about a fraud perpetrated by someone from a minority racial group is significantly more likely to blow the whistle anonymously when a social value message is present versus absent, as the presence of a social value message reduces fear of being perceived as racist. However, we do not find that race dissimilarity is significantly associated with non‐anonymous whistleblowing intentions, irrespective of the presence of a social value message. Furthermore, in non‐anonymous whistleblowing situations, potential whistleblowers have to disclose their identities to the tax authority to become eligible for a cash reward. Even when potential whistleblowers can choose the amount of a cash reward they would have to be paid in order to blow the whistle, our results show that whistleblowing intentions do not increase significantly when perpetrators and potential whistleblowers are of different races. Overall, our results suggest that the societal value of tax whistleblowing and the use of cash rewards for whistleblowing are limited by other sociological considerations.

Article: What’s in a Name?: The Classification of ‘Interest’ on Crypto-assets in South Africa and Beyond

Decentralized finance (DeFi) represents a specific application of crypto-asset technology that has made significant advancements in adoption. While academic tax literature has focused on basic crypto-asset transactions, the tax consequences of DeFi transactions have been much less frequently explored. This study considers whether income or expenditure arising in specific DeFi transactions might be classified as interest in terms of South African income tax legislation as well as within the international tax context. Classification as interest has significant implications. Within South African domestic legislation, it impacts the determination of source, quantification of amounts, timing of recognition, application of exemptions, and imposition of withholding tax. Internationally, it has implications for the determination of jurisdictional taxing rights under double tax agreements. This study proposes that, while historically, interest may have been thought of exclusively as arising in the context of monetary debt, this is not a definitive characteristic of interest. Rather, interest represents remuneration for the provision of capital in the form of a loan principal with a contractual right to repayment. Whether each of these elements is present in the cases of the identified DeFi transactions is inconclusive. The study therefore recommends the provision of guidance to taxpayers by South Africa and other jurisdictions, and supports a coordinated approach among jurisdictions in the determination of income tax outcomes.

Another Uneasy Compromise: The Treatment of Hedging in a Realization Income Tax

Tax law distinguishes between holding an asset and disposing of it. Dispositions are "realization" events, occasions for taxing accrued appreciation, while holding is not. An owner of an asset who would like to dispose of it may instead hold the asset and hedge. Hedging, like disposing, changes a taxpayer's exposure to risk, but is, in many cases, not a realization event. A taxpayer may hedge an asset by obtaining a derivative financial instrument whose value varies inversely with the value of the asset. Derivative financial instruments thus enable taxpayers to simulate a disposition without current tax. Because hedging is often a close economic substitute for disposing, hedging should arguably be taxed like a disposition. If taxpayers are indifferent between two methods of accomplishing the same result, tax law can create social costs by taxing the two methods differently. Indeed, on January 12, 1996, the Treasury released a proposal that would treat an owner of an appreciated asset as having sold the asset if the person enters into a transaction that offsets exposure to risk in the appreciated asset. Several authors also favor treating hedging as a realization event, while others believe that this would not be a helpful reform.This article explores the conceptual and practical foundations and limits of the economic substitute argument for taxing hedging like a disposition. Within the context of an income tax, reformations of the realization requirement to apply to hedges might well accomplish little improvement in the efficiency and equity of the tax system because the realization requirement itself is a departure from an ideal income tax. Although treating hedging as a realization event might reduce transaction costs associated with hedges, it would encourage taxpayers to engage in more complicated and expensive transactions to avoid the new realization rule and would increase the extent to which taxpayers are locked into investments that they would prefer to sell. As to equity, the current ability to hedge without tax undermines the tax on capital. But, so too does the ability to hold without tax, and this undermines the equity argument for taxing hedging. By exposing the inevitable formality of the realization requirement, this article supports examination of a broader reform that would apply accrual taxation to marketable securities.

Mandatory Binding Arbitration: Avoiding Stalemates Over the Tax Chessboard

The resolution of tax treaty disputes under the Mutual Agreement Procedure (MAP) mechanism is inherently problematic. This article examines how the introduction of final-offer arbitration (FOA) can improve dispute resolution using a game-theoretical approach. It will be argued that arbitration introduces an element of finality that was demonstrably absent in the MAP while also contributing to the speedier resolution of disputes which is beneficial to all international stakeholders. After demonstrating the advantages of arbitration, the paper considers how its institutional design can be optimized in the tax context. It makes proposals regarding the publication of arbitral decisions to address concerns of countries that are still skeptical about whether or not to endorse it. Tax dispute resolution, game theory, mandatory binding arbitration, double tax treaties, mutual agreement procedure, baseball arbitration, international taxation.

Introduction: A Contemporary Guide to Tax Justice and Tax Fairness

Abstract This is an introduction to the research papers that make out this Nordic Tax Journal special issue on inequality within the international tax regime. The special issue is an outcome of the discussions that took place at the (online) conference hosted by Copenhagen Business School in September 2020. In addition to introducing the papers of this special issue, this introduction also provides a contemporary guide to tax justice and tax fairness with an emphasis on theories and principles applicable to the international tax context as this was the overall theme of the conference.

Being mindful in the tax context in Italy: Examining whether and how mindfulness relates with tax evasion intentions and support for tax progressivity.

Two studies explored whether and how mindfulness relates with citizens’ tax evasion intentions and support for progressive tax rates. Based on theoretical and empirical grounds, in Study 1 (N = 1,175) we proposed that mindfulness would be negatively related with tax evasion intentions through decreased social dominance orientation. Drawing on Duckitt’s dual-process motivational model, in Study 2 (N = 722) we proposed that mindfulness would be positively related with support for progressive taxation through the mediation of lower competitive-jungle beliefs, and then lower social dominance orientation. Instead, we did not expect to find mediation of the link between mindfulness and support for progressive taxation through dangerous-world beliefs and right-wing authoritarianism. These studies inform about the motivational pathways through which mindfulness relates with tax evasion intentions and support for progressive taxation.

The Entitlement to Tax

As a result of the significant need for additional discussions on the inequality which currently shape international tax matters, Copenhagen Business School hosted a conference concerning inequality within the international tax regime in September 2020. The conference brought together researchers at the forefront of their respective fields to identify, discuss, and to underline future challenges associated to inequality in the international tax context. This special issue is an outcome of papers presented at the conference and concerns the relationship between developing and developed states with an emphasis on present shortcomings when allocating taxing rights in a fair and sustainable manner.

Bringing tax avoiders to light: moral framing and shaming in a public goods experiment

AbstractWith a linear public goods game played in six different variants, this article studies two channels that might moderate social dilemmas and increase cooperation without using pecuniary incentives: moral framing and shaming. We find that cooperation is increased when noncontributing to a public good is framed as morally debatable and socially harmful tax avoidance, while the mere description of a tax context has no effect. However, without social sanctions in place, cooperation quickly deteriorates due to social contagion. We find ‘shaming’ free-riders by disclosing their misdemeanor to act as a strong social sanction, irrespective of the context in which it is applied. Moralizing tax avoidance significantly reinforces shaming, compared with a simple tax context.

Spillover Tax Precedent

We know that pro se litigants often lose. However, we know almost nothing about the circumstances in which they win. One such circumstance, this Article finds, is when they can take advantage of favorable precedent. This Article calls those favorable precedents for pro se litigants “spillover precedents.” Spillover precedents are cases with redistributive downward ripple effects that subsequently benefit pro se litigants. This Article is the first to examine the potential redistributive effects of precedent. To focus the inquiry, the Article carried out an empirical study of Tax Court cases from 2015-2019 in which pro se litigants won. This analysis revealed the major role of spillover precedent. The Article details how pro se taxpayers use spillover precedent, describing major examples and identifying patterns in them. The Article then examines the normative implications of spillover precedent, suggesting policy interventions, focusing particularly on the potential role of low-income taxpayer clinics, and considering the distinguishing features of the tax context.

Political Justice and Tax Policy

In addition to valuing whether a tax policy is equitable, efficient, and administrable, I argue we should ask if a tax policy is politically just. Others have made a similar case for valuing political justice as democracy in implementing just tax policy. I join that call and highlight why it matters in one arena—tax exemption. I also further that discussion by arguing that politically just tax policy does the least harm to the democratic functioning of our government and may ideally enhance it. I argue that our right to an equal voice in collective decision-making is the most fundamental value of political justice. To test this case, I evaluate our choice to exempt “social welfare organizations” from the U.S. income tax. In addition to efficiency and equity, I also ask whether the policy is politically just in a democratic sense. I examine three models of democratic justice: liberal, republican, and deliberative. In making the democratic case, I try to find commonalities among the three in order to further what an agreed upon notion of democratic justice might look like in the tax context. I contend that the notion of democratic justice must exist at the substantive level of the Internal Revenue Code (“Code”). This Code-level application demonstrates that the typical criteria of efficiency and fairness do not provide sufficient criteria to evaluate the justice of tax-exempt policy. Political justice provides additional important evaluative criteria. There are likely significant other parts of income tax policy that need to be considered from the value of political justice as democracy as well.

Getting Down to Brass Tax: Why Courts Should Use Equitable Tolling to Help Taxpayer-Petitioners Impacted by COVID-19

The COVID-19 pandemic caused some of the sharpest rises in American unemployment and poverty seen in a generation. This left people with less money in their pockets, but also less time and access to resources to diligently pursue their legal rights and remedies. Congress responded by providing some financial aid via stimulus packages. But without accompanying procedural relief from various filing deadlines, many will face financial liabilities to the government they otherwise might not, particularly in the tax context. This Comment advocates for greater flexibility when taxpayer-petitioners miss filing deadlines due to COVID-19-related hardships. I argue that when time limits in the tax context can properly be considered non-jurisdictional claims-processing rules, courts can rely on precedent from other bodies of law to expand the use of equitable tolling, limited by a modified financial disability standard.

Equitable Rescission of Contracts for Mistake in Canada After Great Peace: Whither Solle v. Butcher?

In 1949, Lord Denning of the Court of Appeal of England in <i>Solle v. Butcher</i> held that equity could rescind a contract in respect of which all parties had made the same mistake, provided that the mistake was "fundamental" and the party seeking rescission was not at "fault." Since then, the decision has been under attack. In 2002, the same court in <i>Great Peace</i> purported to overrule <i>Solle v. Butcher</i>, but in 2020 the UK Supreme Court, in one sentence in an otherwise unconnected decision, suggested that equitable contractual rescission may not be dead yet. This article explores <i>Solle v. Butcher</i> in the context of Canadian law in general and a tax context in particular. It concludes that equitable contractual rescission is alive and well and living in Canadian tax law.

Policy Forum: The GST/HST Obligations of Non-Resident E-Commerce Firms—Jurisprudence and Policy

E-commerce presents a broad range of challenges for policy makers. In the tax context, it has the potential to obscure the relationship between a firm and the appropriate taxing jurisdiction. This article explores the goods and services tax (GST)/harmonized sales tax (HST) obligations of non-resident e-commerce firms with no physical presence in Canada—specifically, whether those firms may be required to register for, collect, and remit GST/HST in respect of their activities in the Canadian market. Recent developments in the common law (albeit in a non-tax context) indicate that non-resident e-commerce firms with no physical presence in Canada may be found to be carrying on business in Canada. Since carrying on business in Canada is a key element in determining a person's GST/HST obligations, it is likely that non-resident e-commerce firms that are found to meet the requirement will be subject to such obligations in respect of taxable supplies made digitally in the Canadian market. That said, there is at present a great deal of uncertainty about the specific factors to be used in determining whether the activities of a non-resident e-commerce firm are sufficient to meet the carrying-on-business threshold. The author of this article recommends that Parliament should address this uncertainty by amending the Excise Tax Act to deem non-resident e-commerce firms to be carrying on business in Canada if they exceed specific de minimis sales thresholds.

Carbon Tax, Carbon Leakage and the Theory of Induced Innovation in the Decarbonisation of Industrial Processes: The Case of the Port of Rotterdam

A higher price of CO2 emissions is required to enhance the industrial transition and investment in low-carbon technology. However, the specific mechanisms to tackle the risk of carbon leakage and create an attractive environment for green investment are highly contested in the academic literature. Opposing perspectives regarding the appropriateness and desirability of government intervention in the economy result in different approaches to the decarbonisation of industrial processes. This research builds on existing academic knowledge in the fields of carbon leakage, induced innovation and government intervention to assess the effects of a carbon tax in the industrial cluster of the Port of Rotterdam within the context of a carbon tax on industrial GHG emissions proposed in the Dutch National Climate Agreement. The main finding of this study shows that investment leakage constitutes the main threat instead of carbon leakage in the face of a higher carbon price. Regarding the theory of induced innovation, limited abatement options are available for the industrial cluster and there is the need to scale up existing technologies. Lastly, to both tackle the risk of investment leakage and enhance the scaling up of low-carbon technologies, government intervention in the form of regulations, subsidies and enabling conditions is vital.