Tax Optimization Research Articles

Retraction Note: Coastal meteorological characteristics based on big data and financial tax optimization of urban enterprises

In recent years, many cities in the world have been hit by the high temperature heat wave and suffered heavy losses. And many coastal cities have been affected to a certain extent. Through reasonable urban form and architectural design to cope with the heat wave, improving the city’s ability to cope with high temperature has become an important planning and mitigation strategy to adapt to urban high temperature. In this paper, big data is applied to the study of coastal weather characteristics. From the perspective of urban planning and architecture, the interaction mechanism of coastal weather characteristics is discussed by using quantitative analysis methods such as correlation analysis and spatial regression model, which provides an important basis for the planning and urban design of high temperature heat wave. Then, taking urban morphology parameters, land use parameters and LST as variables, Pearson correlation coefficient was calculated by SPSS and GeoDa tools, and a spatial regression model was established to explore the quantitative relationship between coastal weather characteristics and land surface temperature. In the Pearson correlation coefficient, the correlation between vegetation coverage and LST is the largest, showing a negative correlation, with the coefficient of −0.595; 595. In addition to coastal climate types, the correlation between building density and LST is the largest, the coefficient is 0.360, positive correlation, the correlation is the smallest. With the application of big data technology, the tax collection and management mode will develop in the direction of intelligence, efficiency, fairness, and accuracy. Big data technology will provide a new direction for the research of coastal meteorological characteristics and the optimization of urban enterprise finance and taxation. In this paper, through the study of coastal meteorological characteristics of big data, it is applied in the city enterprise financial tax, to promote the enterprise financial tax more standardized.

ANALYSIS OF SME’ TAX BURDEN IN THE MEAT PROCESSING INDUSTRY OF THE URAL REGION

The tax burden for small and medium-sized businesses has always been a significant indicator of business activity state’s stimulation. It is especially important for the manufacturing sector, the development of which is strategically important in the context of the growing political crisis and global instability. In this paper, an assessment of the tax burden is carried out according to a sample of 61 companies - subjects of small and medium-sized businesses in the most developed territory of the country - the Ural Federal District. The sample includes only enterprises with a common tax system. This is necessary for the comparability of the authors' calculations with the official normative values of the tax burden established for the corresponding sub-sector. The main hypothesis of the study is that small and medium-sized businesses underestimate their tax burden by applying the general taxation system, and thus, the standard established by the Government of the Russian Federation is objectively overestimated, since it does not take into account the specifics of tax optimization of such companies. The study result is the identification of an absolute discrepancy between the actual values of the tax burden and the normative ones. Thus, 100 % of the sample companies have a lower level of it, while for medium-sized companies the gap is maximum and is 21 times. According to calculations, 60-70 % of the sample companies occupy the payroll fund in order to reduce the tax burden on insurance premiums. In conclusion, it is argued that it is necessary to review the state tax policy in relation to small and medium-sized businesses, namely, to create conditions for reducing tax time and in the conditions of the general taxation system.

Корпоративная налоговая культура и изменения налоговой лояльности населения: эффект пандемии

The problems of evasive tax behavior of large corporations are considered. It is shown that tax optimization, being a legal strategy, does not correspond to society’s ideas about honest tax behavior, since it is one of the factors of the growth of economic and social inequality. It is noted that during the Covid-19 coronavirus pandemic, this inequality deepened, causing a decrease in the loyalty of the population to the state’s distribution policy. The payment by economic entities of a «fair» (provided for by law) amount of tax by the public is considered as their action for the benefit of society, a manifestation of the moral position and social responsibility on the part of the company’s management. The directions for the formation of the corporate tax culture are proposed.

Low-Tax Jurisdictions in International Tax Planning

Until recently low-tax jurisdictions have played an important role in the formulation of tax planning schemes by multinational enterprises. However with the onset of global trends towards deoffshorization, existing methods of tax optimization have seen significant changes. As there is currently no one single approach when creating the definition of, or defining a “low-tax jurisdiction”, in this article the definition and the main features of lowtax jurisdictions are proposed and the main stages in the formation and development of low-tax jurisdictions are detailed. On the basis of research carried out on the national legislation of low-tax jurisdictions, the main company types which meet the special legal formulae that can be incorporated into low-tax jurisdictions have been analyzed. In order to highlight similar characteristics and to simplify the analysis of the national legislation of low-tax jurisdictions so that general recommendations covering the nature of measures which can be used to counter illegal tax avoidance, tax evasion, money laundering and other illegal financial machinations, different classifications of low-tax jurisdictions have been analyzed. The unfair and perhaps even illegal use of low-tax jurisdictions often leads to violations of core tax principles which may have an impact on the overall size of budget revenues available to high-tax countries. Therefore, deoffshorization measures are being proposed at the international level. Currently the main global trend has been to increase the transparency of tax information and of financial transactions which are carried out by international exchanges. This is supported by the strengthening and expansion of cooperation between tax authorities which serves to counter the abuse of provisions in international tax treaties on the avoidance of double taxation.

To the issue of assessing the “health” of medical organizations-borrowers from accounting point of view for a commercial bank

The article deals with the problem of misrepresentation of the accounting statements of medical organizations-borrowers of a commercial bank-small and medium-sized segment-in order to underestimate the tax base in the current realities of the growing tax burden and strengthening control by the tax authorities. The key points of distortion, the legislation regulating the concept of “unjustified tax benefit”, and the impact of tax optimization schemes on the banking structure are presented. The study of the peculiarities of distorting the financial results of medical organizations showed that the most common methods are conducting turnover with affiliated legal entities, splitting the business into units with different tax regimes, and overstating expenses, including the cost price. For the purposes of tax risk foresight, commercial banks try to identify the tax optimization schemes used.

DISTINCTION OF MINIMIZATION (OPTIMIZATION) OF TAXES FROM PREDICATE CRIMINAL OFFENCES IN THE TAXATION SYSTEM OF UKRAINE

The article argues the expediency of considering the issue of distinguishing lawful conduct from predicate criminal offenses of evasion of legal obligations in the taxation system of Ukraine, which are committed in the framework of lawful economic activity. Emphasis is placed on the fact that the state’s economy can be negatively affected by acts committed in a manner not prohibited by law and are determined through the category of “minimization (optimization) of taxes”. It is argued that evasion and optimization on the basis of conscious and purposeful action coincide with the goal – to reduce the tax liability, and at the same time when evading a person consciously finds a way to achieve the goal for which there is a direct rule of criminal prohibition and wants socially dangerous consequences. Scientific provisions on the subjective side of a person’s behavior in reducing the tax burden by selected groups of methods and techniques of tax planning are revealed. There is emphasized the author`s approach for distinguishing features of underlined previously groups and methods by the subjective side of activity. The purpose of the study is to develop an author’s scientific approach to the separation of minimization (optimization) of taxes from predicate criminal offenses in the taxation system of Ukraine. It is concluded that when comparing groups of methods and ways to reduce the payment of tax liabilities should be borne in mind that it is the intent embodies the awareness of the actual nature of actions and awareness of their social significance, i.e. the degree of harmful effects on public relations. According to the intellectual component of intent in the commission of illegal acts, awareness of the public danger of the perpetrator occurs indirectly through the understanding of the public danger of acts of non-performance or improper performance of their legal duty. According to the volitional component of intent, its subject is not only socially dangerous actions, but also the corresponding negative consequences caused by them. The expression of will to use legal and illegal methods and means to achieve the goal of reducing the tax burden are purposeful, but different in nature. When qualifying actions aimed at reducing the tax burden should be borne in mind that certain expressions of will are causally related to mental processes occurring in her mind, and therefore the separation of minimization (optimization) of taxes from predicate criminal offenses in the taxation system of Ukraine a sign of the subjective side.

RETRACTED ARTICLE: Coastal meteorological characteristics based on big data and financial tax optimization of urban enterprises

In recent years, many cities in the world have been hit by the high temperature heat wave and suffered heavy losses. And many coastal cities have been affected to a certain extent. Through reasonable urban form and architectural design to cope with the heat wave, improving the city’s ability to cope with high temperature has become an important planning and mitigation strategy to adapt to urban high temperature. In this paper, big data is applied to the study of coastal weather characteristics. From the perspective of urban planning and architecture, the interaction mechanism of coastal weather characteristics is discussed by using quantitative analysis methods such as correlation analysis and spatial regression model, which provides an important basis for the planning and urban design of high temperature heat wave. Then, taking urban morphology parameters, land use parameters and LST as variables, Pearson correlation coefficient was calculated by SPSS and GeoDa tools, and a spatial regression model was established to explore the quantitative relationship between coastal weather characteristics and land surface temperature. In the Pearson correlation coefficient, the correlation between vegetation coverage and LST is the largest, showing a negative correlation, with the coefficient of −0.595; 595. In addition to coastal climate types, the correlation between building density and LST is the largest, the coefficient is 0.360, positive correlation, the correlation is the smallest. With the application of big data technology, the tax collection and management mode will develop in the direction of intelligence, efficiency, fairness, and accuracy. Big data technology will provide a new direction for the research of coastal meteorological characteristics and the optimization of urban enterprise finance and taxation. In this paper, through the study of coastal meteorological characteristics of big data, it is applied in the city enterprise financial tax, to promote the enterprise financial tax more standardized.

Anti-recessionary aspects of the modern monetary theory

The paper considers the modern monetary economic theory (MMT) from the point of view of the approaches to overcome the current economic crisis by recourse to fiscal and monetary tools. It is shown that its proposals are aimed at overcoming the crisis of the U.S. economy through an additional inflow of investment resources from other states with a simultaneous increase in social stability within the country with the support of a quantitative easing race. It also concludes that the level of taxation in developed states reaches the limit beyond which the economic activity is discouraged. The negative consequences for economic subjects of reducing the possibility of maneuvering between national jurisdictions for tax optimization, and the importance of this process for the preservation of U.S. leadership are demonstrated.

Taxation of the Self‑employed in Poland and other EU Countries – a Comparative Analysis

The article aims to compare the taxation of the self‑employed in Poland and other EU countries. We show that, for years, Poland has been at the forefront of EU countries with the highest self‑employment rates. Our analysis indicates that many people in Poland chose the status of self‑employed, guided by tax optimization. Due to large differences in the burden of income tax and social security contributions of people working full‑time and choosing self‑employment, there are strong incentives to move from employment to fictitious self‑employment. Our study shows that this significantly affects the revenues of the state budget and social security fund in Poland.

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.

Combining Investment and Tax Strategies for Optimizing Lifetime Solvency under Uncertain Returns and Mortality

This paper considers investors who are looking to maximize their probability of remaining solvent throughout their lifetime by using an algorithm that aims to optimize their investment allocation strategy and optimize their tax strategy for withdrawal allocations between tax deferred accounts (TDAs), Roth accounts, and taxable stock and bond accounts. This optimization works with stochastic investment returns and stochastic mortality, extending and combining different investment and tax-efficiency paradigms. We find that optimizing the investment strategy has a much larger impact on the investor remaining solvent than optimizing the tax strategy. This result is key to effectively optimizing both strategies simultaneously. This optimized investment strategy soundly beats a standard target date fund strategy, and the novel optimized tax strategy displays optimal desired properties suggested by non-stochastic tax optimization research.

Tackling virtual production

This paper is an attempt to contribute to the discussion on multinational enterprises shifting certain economic activities to special purpose entities abroad for reasons of tax optimisation. The authors argue that a transfer of production to a special purpose entity abroad permitted by tax law is not necessarily a transfer of production in an economic sense. Special purpose vehicles can be involved in production processes from a legal point of view without producing any goods or services in reality – a phenomenon the authors call ‘virtual production’. Thus, simply mirroring the legal transactions in national accounts may result in a distorted representation of economic reality. Unfortunately, the System of National Accounts in its current version as well as other existing guidelines lack clear guidance in order to distinguish virtual from real economic activity in the context of special purpose vehicles. This paper offers a proposal for improvement of existing definitions and concepts.

The Determinants of Self-Employment - Evidence from Self-Employed Persons in Poland

Purpose: The primary purpose of the research is to build a model that makes it possible to define the categories of entities through which self-employment is used as a form of tax optimization. This would facilitate the creation of more efficient tax instruments that prevent false self-employment without discouraging real entrepreneurship. Design/Methodology/Approach: The research method is a survey carried out from September 2020 on a representative sample of 400 Polish self-employed persons representing specific trades. Subsequently, machine learning classification algorithms were implemented to find factors characterizing self-employed persons with different tax-optimization attitudes. Findings: The research results have shown that classification and regression tree (CART) and bootstrap aggregation (bagging) tree models can be helpful to determine whether a self-employed person is likely to use self-employment as a tax optimization method. The three main factors determining classification are the self-employed person’s attitude towards risk, the industry in which they work, and the length of their business experience. Practical Implications: The research performed made it possible to identify factors that affect self-employed people’s attitude towards reducing their tax burden, in particular, to verify the scope of taxpayers becoming self-employed to reduce their tax burden (treating self-employment as a form of tax optimization), and to determine whether there is a way to shape tax rules to encourage entrepreneurship while minimizing the risk of abuse such as forcing employees to become self-employed or people registering as self-employed to avoid taxation. Originality/Value: I have proposed the opposite than pervious approach: this research is performed among self-employed persons to extend knowledge about their attitude toward becoming self-employed. This approach should be more efficient in understanding the process of individual decision-making between becoming an employee or self-employed.

Tax Optimization in the Modern Tax System Under the Influence of Digitalization

Abstract The article considers the importance and methods of organizing tax planning as an effective way to optimize tax payments under the influence of the global digitalization of the economy on the example of the Russian legal system in a comparative perspective. At the same time, the article examines the issues of counteracting abuse in the field of taxation. Current research substantiates the expediency of introducing the category of tax optimization into scientific circulation is and establishes its criteria. To understand the prospects of domestic taxation mechanisms, they are considered in comparison with similar mechanisms of other states and the legal regulation of foreign countries of Europe (European Union), the United States, as well as respecting the initiatives and solutions of international organizations (oecd, European Commission) in the plane examined. A macroeconomic assessment of the effectiveness of the use of digital tax administration is carried out and the stages of its institutional development are highlighted. Digital technologies ensure the increase in the collection of taxes and other obligatory payments, reducing labor costs for tax control, and reducing an administrative burden on business. The main approaches to the digital transformation of the modern tax system are considered, new innovative developments and digital technologies in Russia are highlighted. It is noted that at present, the Russian tax system, in the context of the development of the digital economy, is moving from an electronic to a “proactive state”.

A game theoretic approach for analyzing electric and gasoline-based vehicles’ competition in a supply chain under government sustainable strategies: A case study of South Korea

This study investigates the issue of electric vehicle (EV) pricing, as well as the issue of determining the extent of electric vehicles' technological improvements on gasoline vehicles (GVs). Furthermore, it looks at four important goals in line with government sustainability plans including the number of EVs, CO2 emissions reduction (ER), revenue seeking (RS), and customer surplus (CS). Two strategies, including a tax optimization strategy (TO-strategy) and a subsidy optimization strategy (SO-strategy), are suggested in this study as ways to reach the four goals by finding optimum values for four decision variables. Two decision variables of the TO-strategy are the determinations of a GV and gasoline taxes. SO-strategy decision variables are the determinations of a manufacturer and consumer subsidies. The cooperation of government in R&D expenditures is considered as a manufacturer subsidy. The EV manufacturer will optimize research and development efforts to improve the level of EV technology and the government will optimize its share of cooperation in expenditure of the manufacturer's R&D programs. The problem under study is solved by a backward induction procedure. The obtained results are challenging and are not straightforward. For instance, if the government seeks to maximize the number of EVs, or wants to minimize pollution, or maximize revenue, it should consider a tax optimization strategy. Under the TO-strategy, if the government has RS or CS goals, the government must increase the GV tax and decrease the fuel tax. Under the SO-strategy, the government must increase its manufacturer subsidy and decrease its customer subsidy.

Collection of Taxes from Ultimate Beneficiaries: Russian Regulatory Model

Abstract The problem of aggressive tax optimization and the related issue of liability of individuals who are the ultimate beneficiaries of company’s tax liabilities are becoming more and more regulatory complex. The purpose of the study, implemented using the system-functional method, is to theoretically substantiate the ways to overcome the problems that arise when collecting taxes in favor of the state from the ultimate beneficiaries. The results of the study indicate that the corporate structure cannot fully protect the beneficiary of an enterprise from property liability for committing a tax offense. The study proposes a strategy to improve the efficiency of collection of receivables from real beneficiaries. The results of this study are of great practical importance for the subjects of legislative initiative and practitioners in the field of tax legal relations. If under the conditions of the Russian legal system until 2016 it was practically impossible to prove the informal connection of a company with an actual beneficiary, then as a result of the adoption of Federal Law No. 401-FZ of November 30, 2016, the courts began to take into account any evidence that could become an argument for bringing the ultimate beneficiary to justice. This in turn led to the emergence of controversial issues. For this reason, the authors highlighted the problems arising as a result of law enforcement.

VAT on Webinars

The ongoing corona pandemic and the resulting ban on human gatherings have brought about a boom for webinars and other kinds of online events. As there is no physical location, the question of the place of supply for VAT purposes arises in the case of paid services. The result of such an analysis based on current VAT rules may surprise some, as it opens up scope for tax optimization. An explicit regulation that accords with the consumption tax concept of VAT would be necessary to avoid risks, as well as untaxed revenues and double taxation. However, this may require a change in the EU VAT Directive with the coordination of all Member States.

International debt and special purpose entities: Evidence from Ireland

This paper examines international debt financing through Irish-resident special purpose entities (SPEs). Using a unique new dataset covering the population of Irish-resident SPEs reporting to the Central Bank of Ireland over the period 2005–2017, we identify cross-country debt financing links channelled through SPEs. The empirical analysis suggests that tax optimisation is an important motive, particularly for sponsors of Irish-resident securitisation vehicles, while investor protection and financial development are important additional considerations for sponsors of non-securitisation vehicles.

Международный опыт оптимизации налогообложения

Международный опыт оптимизации налогообложения

Groups of Companies in European Comparative Law

Groups of companies are today key players in international trade through their crossborder activities. Their asset management – sometimes to the detriment of a subsidiary – or tax optimisation offered by a multitude of laws applicable to their subsidiaries make it essential to regulate groups more closely. It is unanimously accepted in France or the UK, for example, that the group of companies does not have its own nationality or a single lex societatis. However, this classic solution could be revisited and the group of companies could be apprehended as a single legal unit in specific cases. Today, few national laws deal with groups of companies as a legal unit. Very often, these are scattered provisions. In many European states, an economic unit of the group can sometimes be retained by certain legislative and regulatory provisions but also by the courts such as in competition law or in tax and social matters. The purpose of this article is to demonstrate that regulation of groups of companies deserves to be revived by the European authorities and that the economic, political and social challenges are considerable for all member states of the European Union and beyond. Indeed, the Court of Justice of the European Union has shown real normative power with regard to groups of companies, due to the absence of a directive or regulation applicable to groups. The German legislation on groups of companies is a prime example and the regulations relating to the European company remind us that a consensus is possible at the level of the European Union.