Tax Maneuver Research Articles

Налоговые и таможенно- тарифные инструменты изъятия нефтяной ренты в доход российского бюджета

For countries focused on the extraction and processing of natural resources, including Russia, the crucial task is to ensure the rational extraction and distribution of natural rent. The tax model applied to natural rent should facilitate its optimal allocation to the budget without undermining the motivation of resource users to invest. The purpose of this study is to gauge the extent of oil rent extraction to the Russian budget and to propose strategies to improve the efficiency of oil rent redistribution to the state budget. According to the author’s hypothesis, export customs duties, compared to the mineral extraction tax, are more effective in achieving the desired redistribution of funds from resource users to the budget. The analysis shows that from 2005 to 2022 up to 87% of the oil rent received in Russia was extracted through rent payments to the state budget. However, in recent years the degree of oil rent extraction has decreased to 56%. This decline can be attributed to the tax maneuver initiated in Russia since 2015, entailing the reduction and eventual abolition of export customs duties and an increase in the mineral extraction tax rate. The results obtained indicate a decline in effectiveness of rent-based taxation in Russia due to the decreasing fiscal significance of rent payments. Furthermore, their regulatory function, designed to stimulate taxpayers to make investments, has weakened. These findings provide valuable insights for shaping fiscal policies and lay the foundation for further research in this area.

Effectiveness of Tax Benefits for Information Technology Organizations in Russia

The subject of the study is a set of measures of tax incentives for the information technology industry in the Russian Federation — “tax maneuver in IT”, launched from the beginning of 2021. The purpose of the study is to identify and qualitatively assess the stimulating effect of the tax maneuver in IT, which is expressed in changes in key financial and natural performance indicators of IT industry organizations, and to develop proposals on ways of tax incentives for the development of the industry. The article describes the distortion of the aggregate tax reporting characterizing the IT industry, which takes into account not only recently established IT organizations, but also “nominal” separates from large organizations IT subdivisions or technically clarified classification code, making it inappropriate to use such reporting as a basis for analysis and reliable conclusions. Based on the data of the public financial statements of selected sample from the top-100 Russian IT organizations, the article analyzes the dynamics of financial indicators of their activities, among which are the profiles of profiles, operating profit, net profit, investment in basic assets, the number of staff, the amount of products supplied for export, the capitalization of the company. The observation was conducted for 2017– 2022 and covers the periods both before and during the engagement of tax benefits. A comparative study was carried out with similar indicators of the organizations of the “control group”, which included IT companies operating in other countries that were not affected by such tax benefits. According to the results of the study, small or no extra growth was observed in key financial indicators of IT organizations due to the tax maneuver compared with the “pre-maneuver” period and compared with the indicators of the control group. It is concluded that there is no evidence of a significant impact of the tax maneuver on the development of the IT industry in Russia. We proposed dismantling of the “maneuver” and transition, based on the Chinese and some EU countries approaches, to taxation of the qualified profit. The latter is the profit of Russian and foreign IT developers from the localization of IT development and value creation in Russia. The achievable effective rate is 2.5%.

Taxes and Customs Duties as Instruments for Extracting Oil Rent into the State Budget: The Case of Russia

For countries focused on the extraction and processing of natural resources, including Russia, a crucial task is to ensure the rational extraction and distribution of natural rent. The tax model applied to natural rent should facilitate its optimal allocation to the budget without undermining the motivation of resource users to invest. This study seeks to gauge the extent of oil rent extraction into the Russian budget and suggest strategies to enhance the efficacy of redistributing oil rent to the state budget. Our hypothesis proposes that export customs duties, compared to the mineral extraction tax, prove more effective in achieving the desired redistribution from resource users to the budget. To assess the extent of oil rent extraction, we devised a methodology based on calculating the oil rent generated in Russia. This method involves measuring the difference between the income generated by the oil industry and the total expenses incurred by oil sector companies. Our analysis reveals that, from 2005 to 2022, up to 87% of the oil rent generated in Russia was extracted through rent payments to the state budget. However, in recent years, the degree of oil rent extraction has decreased to 56%. This decline can be attributed to the tax maneuver initiated in Russia since 2015, entailing a reduction and eventual elimination of export customs duties, coupled with an increase in the mineral extraction tax rate. Our results indicate a diminishing effectiveness of rent-based taxation in Russia due to the reduced fiscal significance of rent payments. Furthermore, their regulatory function, designed to incentivize taxpayers for investment contributions, has weakened. These findings offer valuable insights for shaping fiscal policies and lay the groundwork for further research in this domain.

Russian tax policy under sanctions pressure: theoretical approaches and alternative directions for practical implementation

The article examines the theoretical and methodological issues of building the tax policy of the state in the face of overcoming the negative consequences of the sanctions pressure of the collective West and the United States. We presented the results of the analysis of external and internal factors influencing the implementation of the state tax policy. We have formed five groups of external factors that are most relevant for tax policy in the context of sanctions pressure in the present period of time (the significance of sanctions pressure; the objective need for a significant increase in budget revenues in the context of the military operation; the need for comprehensive support for organizations of the military-industrial complex; ensuring the technological sovereignty of the country; electoral campaign 2023-2024). Based on a generalization of Russian taxation practice in 2014-2021, we have identified the most effective tax tools to counteract the negative economic consequences of sanctions pressure on Russia. The result of the study was the substantiation of the feasibility of an alternative solution to the issue of switching to a progressive personal income tax as a tool to increase budget revenues and equalize income inequality between the rich and the poor. Two possible approaches to the implementation of the tax maneuver in the field of taxation of the population are argued. This is a revival in the Russian tax system of the previously levied (1992-2005) inheritance and gift tax, taking into account modern realities. We have shown the relevance of raising the VAT rate as a tool for transferring part of the tax burden from the population's income to their expenses (consumption).

Налоговая политика в нефтегазовом секторе Российской Федерации в условиях структурных изменений мировой экономики

The subject of the study is the taxation of the oil and gas sector in the conditions of economic sanctions, structural changes in the mineral raw materials markets. The purpose of the work is to determine the main directions of development of taxation of mineral extraction in order to provide incentives for their extraction and stable revenues of the budget system. The current state of taxation of production and export of hydrocarbons, the impact of recent legislative changes on the formation of the revenue side of the budget system of the Russian Federation, the dynamics of oil and gas revenues are analyzed. The main attention in the article is paid to the scientific analysis of the current state of taxation of the oil and gas sector in the conditions of the embargo and the "price ceiling" for Russian energy resources. As a result of the research, the directions of the development of the taxation system for the production and export of hydrocarbons based on the basic principles of taxation are formulated, the early completion of the tax maneuver in the oil industry and the need to revise the relevant chapters of the Tax Code of the Russian Federation are justified.

Oil Tax Maneuver: Analysis of the Consequences and Forecast of the Impact on the Development of a Company.

The article discusses the transformation of the taxation system in the oil and gas sector and modern approaches to assessing its impact on the development of resources. A predictive model for assessing the impact of the tax maneuver on the development of an oil company has been proposed. Approbation of the approach was carried out on the example of the Irkutsk Oil Company and Rosneft PJSC. The forecast showed the same impact of the tax maneuver on the largest oil company in Russia and on a company of regional importance.

Особый режим налогообложения российских ИТ-компаний: от выбора преференций до налогового маневра в отрасли

IT industry is noticeably distinguished by the tax support provided to it in the Russian economy. Nowadays software companies are treated as main contributors to national technological breakthrough being one of the main priorities of federal tax policy. Tax maneuver of 2021 significantly changed well-known tax rules, but some of novelties became a logical development of previously implemented measures. We systematize them by following our classification that introduces three main phases, all of which provided a qualitative update of the previous taxation framework, and for analysis consider particular reliefs as a unified, specific tax regime integrated in the general taxation system. The purpose of the article is to identify priorities and evaluate effectiveness of mechanisms designed to stimulate IT companies, including a preliminary assessment of valid perimeter and performance of the maneuver. Obtained results indicate that the tax regime initially given to software business had a bad design, an extremely narrow scope of beneficiaries and, due to this, a little effect on the IT industry; modernization of that design with the revision of basics was necessary at least in order to stop the decline of IT industry in the part of small companies. However, the main trend of recent tax policy demonstrates a strengthening of sustainable business with comparative fall of competitiveness of beginning entrepreneurs. In sum, the tax maneuver has a positive economic impact but covers, according to our estimates, less than 20% of IT companies.

Инвестиционная привлекательность проектов по разработке нефтяных месторождений в условиях налогового маневра. Оценка на примере Западно-Сибирского экономического района

The West Siberian economic region remains a territory with high potential of liquid hydrocarbons production, which serve as a reserve for long-term development not only for this region, but for Russia as a whole. Experts claim that Western Siberia provides 70% of Russia’s oil production and accounts for 61% of the mineral extraction tax revenues. According to forecasts of the Ministry of Energy, if oil production is not stimulated, then by 2035 the volume of oil production will significantly reduce and budget revenue will decrease by 4.1 trillion rubles. At present, in order to increase the investment attractiveness of the industry, changes in tax and customs legislation are being introduced. However, the effects of the reforms are not obvious. Employing scenario analysis, the case method and financial modeling on the basis of publicly available information, we assess the impact of changes in tax and customs legislation on the investment attractiveness of oil field development projects. The main hypothesis of the study about the positive impact of the tax maneuver on the attractiveness of projects was partially confirmed. However, in all considered scenarios the internal rate of return does not exceed 13%. This is significantly lower than the global average rate of return for oil and gas industry. This points to the need for further adjustments to the tax and customs legislation to ensure sustainable growth and development of the oil and gas industry. The model created to assess the impact of alternative tax regimes on the investment attractiveness of hydrocarbon exploration and development projects can also be used to identify potential benefits and tax consequences for both the investor and the state.

Opportunities for tax planning for digital companies: international experience

The article deals with comparing taxation conditions of a range of countries which can be applied for IT companies as the subjects of digital economy. The author examines the peculiar features of tax privileges, tax planning tools and optimization for running digital companies in such countries as Estonia, Hong Kong, Great Britain, Malta and Ireland. These countries are included in a number of international ratings and are highly estimated by foreign experts as regards the level of convenience of doing IT business. The author especially focuses on the financial calculations of possible ways for tax optimization and the key features of implementation of the extremely popular in European countries IP-Box regimes. In conclusion the author concentrates on the patterns and trends within the tax jurisdictions under consideration including the one regarding the existing treaties on avoiding double taxation. He points out that it is possible to use the international experience in order to create competitive taxation of digital companies in Russia as part of developing addenda to the package of measures (effective 01.01.2021) which is also called “tax maneuver”. In particular, it is suggested that income tax rate for IT businesses in Russia should be altered taking into consideration the foreign countries’ indexes. Moreover, the author presents his ideas on the components of possible use of such measures as “digital residency” as part of the second package of “tax maneuver” measures. The author makes a conclusion on the importance of implementing non-taxation measures for maintaining rapid development of IT-industry in Russia and enumerates the most essential directions and problems of the IT-society and the possible ways of their realization.

НАЛОГОВЫЙ МАНЕВР В НАЛОГООБЛОЖЕНИИ УГЛЕВОДОРОДОВ: ЦЕЛЬ И ПРОБЛЕМЫ ЕЕ ДОСТИЖЕНИЯ

Abstract Since 2015, the Russian Federation has been carrying out a reform in the oil The planned completion date of this reform is 2024. This reform is called the tax maneuver in the oil sector. The main purpose of this maneuver is defined as the rejection of the export duty on oil and oil products. Achievement of this goal presupposes reimbursement of lost income due to an increase in the mineral extraction (MET) in the part related to oil. In addition, as a special condition for the maneuver, it was stipulated that excise taxes on petroleum products sold on the domestic market would be reduced in order to exclude an increase in fuel prices.

Market attractiveness of oil and gas companies as a factor affecting the socio-economic development in regions of their business operations

Subject. I address the impact of market capitalization of oil and gas companies on their contribution to the socio-economic development of regions of presence. Objectives. The purpose is to determine to what extent the factor of high market capitalization of the oil company is crucial in the changing the market environment. Methods. The study draws on methods of economic and statistical analysis. Results. I considered the current state of the Russian oil industry in the context of tax maneuver, and the future evolution of the oil and gas sector from the perspective of government authorities’ desire to develop oil refineries. I performed the financial analysis of operations of two large regional oil companies, namely, Bashneft and Tatneft, examined their contribution to the regions of presence in accordance with the level of market capitalization and ownership structure. The paper highlights the key factors, influencing the contribution of companies to the socio-economic development of regions. Conclusions. In addition to the unfavorable global market conditions, changes in the taxation of oil companies in Russia in the form of tax maneuver are the additive factors that negatively affect the profitability of the industry as a whole. The growth of oil companies’ capitalization has a positive impact on their contribution to the development of regions of presence, depending on the specifics of equity structure. In the face of adverse external factors, the influence of high market capitalization of the oil company reduces drastically due to cumulative decline in business profitability.

Taxation of Digital Companies: Experience of Russia and Other Countries

The article concerns the patterns of development of the tax legislation of the Russian Federation and other countries related to the taxation of companies providing digital services. Some scientific and practical issues affecting the problems of tax incentives for entrepreneurship in digital companies are analyzed. The article covers the issues of the staged transformation of Russian tax law, which occurred as a result of the so-called "tax maneuver" of the rules for taxation of IT companies, associated with the need to stimulate the production of national software. The main idea of the research is - the concept of legal regulation of taxation of digital companies should be based on the supranational agreements reached by states, in accordance with which the digital transformation of tax legislation of individual countries will be carried out. The prospects for the introduction of digital taxes in Russia were also estimated, taking into account the experience of other countries as a unilateral response actions to the failure to reach an international consensus on taxation of the digital economy. At the same time, both the possible risks and the positive aspects of establishing a digital tax, which have a beneficial impact on the Russian tax climate, are indicated. The author uses the historical and comparative legal methods of science, as well as the method of systems analysis.

Tax maneuver on the example of the oil sector in the Russian Federation

Tax maneuver on the example of the oil sector in the Russian Federation

BUDGET RULE AND TAX MANEUVER IN THE DESTRUCTIVE LIBERALIST CONCEPT OF THE BUDGET THREE-YEAR PLAN — 2021–2023

The article reveals the conceptual defects of the designed and currently law-supported budget three-year plan — 2021–2023. Among them, the author includes the authorities’ desire to continue using a rigid budget rule and the implementation of tax maneuvers. The author argues that there is a direct link between the effects of the budget rule and deceleration of the GDP growth in Russia. Overcoming the country-specific recession and the problem of excessive focus of the Russian economy on natural resource extraction should arguably be driven by an increased share of the government spending on its diversification, which requires a substantial relaxation or cancelling of the budget rule. The author concludes that the tax maneuver presents a barrier to curing the «Dutch disease» of the country’s economy and therefore requires serious corrections while preserving excise duties on oil and gas exports and to the contrary, reducing the natural resource extraction tax rates.

Economic effects of tax maneuver

Economic effects of tax maneuver

Бюджетно-налоговый маневр в сфере публичных закупок

The article focuses on the priority of the norms of financial and legal regulation in public procurement, allowing not only to realize the true goals and objectives of public procurement, but also to ensure a balance of public and private interests. The author’s position on the development of competition and targeted support for domestic producers through the use of fiscal maneuver in public procurement is presented. According to the results of the study, it was proposed to legally secure the possibility of using a single tax account of a legal entity in the framework of public procurement in order to implement a budget and tax maneuver.

Tax maneuver in the oil industry: Provisional results and risks for further implementation

The paper analyzes the consequences of the abolition of the export duty on oil and oil products as a necessary step to stimulate energy efficiency of Russia’s economy and eliminate underdevelopment provoked by a long-term subsidizing of inefficient oil refining sector in Russia. The calculation results have shown that even taking into account several deviations from the planned scenarios of changing the parameters of tax regulation of the oil industry in 2014— 2019, the tax maneuver brought over 3.5 trillion rubles (in 2019 — 148 billion rubles) to the state budget in 2014—2017, mainly due to an increase in the base mineral extraction tax rate, and contributed to an increase in the depth of oil refining from 72% to 85%. In addition, the article analyzes possible risks associated with the current plan for reforming the taxation of the industry until 2024 and proposes an alternative that could level some of them. A comparative analysis of the effects of the tax maneuver under the current reform plan and the alternative variant suggests that the latter will allow to achieve a greater total budgetary effect in four years, reduce the cost of subsidizing domestic oil refining, increase the efficiency of Russian vertically integrated oil companies, and reduce the growth rate of oil products prices in the retail market.

Ewolucja polityki Federacji Rosyjskiej wobec Białorusi w kontekście wysiłków integracyjnych w ramach Państwa Związkowego

Despite expectations, 2019 did not bring a significant breakthrough in the existing model of Russian-Belarusian relations. The extreme scenario – Russia’s seizure of Belarus in the course of the process of ‘deeper integration’ is highly improbable. This is primarily because the Kremlin is not significantly determined to change the existing legal and international status of Belarus. Moreover, Belarus is determined to defend the bilateral relations with Russia formed in the mid-1990s and does not accept the Kremlin’s proposals regarding ‘deeper integration’, which mean limiting its sovereignty. Belarus is determined to defend itself against Russia’s demands, which paradoxically increases the level of social legitimacy of Lukashenko’s authoritarian rule. Russia has a wide set of negative tools to influence Minsk (energy blackmail, destabilisation of the political and socio-economic situation), but it has no positive tools. There is also a noticeable lack of internal coherence in the Russian power camp with respect to the future of Belarus. Russia is interested in changing the current model of the bilateral relations in terms of limiting financial losses resulting from the generous subsidy of the Belarusian economy and Minsk’s disregard for existing obligations in the area of customs and taxation. However, Moscow intends to achieve this goal neither by seizing Belarus nor by destabilising the Belarusian political regime. The issue of ‘deeper integration’ of both countries was, from the very beginning, clearly related to other problems that cast a shadow on Russian-Belarusian relations. Therefore, it should be assumed that Russia’s intention was to use a ‘tax maneuver’ to force Belarus to negotiate in the sphere of finance, economy and compliance with Russian customs and tax standards. The most likely scenario for the development of Russian-Belarusian relations assumes maintaining the existing model of relations but, from now on, Belarus will be deprived of a significant part of the ‘integration rent’.

Свести концы с концами

Свести концы с концами

Oil extraction and refining: problematic questions of taxation and administration

The subject of this research is the examination of relevant problems of taxation and administering the oil sector companies in the conditions of changes in oil prices. Special attention is given to the analysis of results of the conducted policy within the framework of tax maneuver with regards to hydrocarbons extraction activity. The goal consists in the analysis of the impact of changes in taxation legislation related to increase in the rates of excise duty for the refined petroleum and introduction of damping mechanism for oil refining companies, as well as improvement of taxation and administering of oil extraction companies. The conclusion is made that the implementation of damping mechanism allows to efficiently and seamlessly regulate the oil products prices even in the conditions of rapid drop in oil prices. In the conditions of drop in oil prices on the international markets, the Russian oil refining plants would reorient significant volume of exports toward domestic market. The taxation reform in oil sector would lead to increase in the refining throughput and output of high quality oil products. The author underlines the need of reducing the tax-exempt minimum in calculation of coefficient that characterized the dynamics of global oil prices, which leads to the increase of tax rates on oil.