Transaction Tax Research Articles

Tax Treatment of Crypto Assets Under Serbian Law – Status Quo and Future Challenges

Abstract The present paper provides a comprehensive analysis of the legal framework relevant for the taxation of transactions and activities involving crypto assets in Serbia. In the introductory part, the author provides a classification of crypto assets intended to serve as the methodological framework within which the taxation of various transactions and activities in the crypto domain will be analyzed, taking into account the principle of tax neutrality. The core of the paper elucidates the results of comparative legal research that the author had undertaken in order to identify diverging approaches jurisdictions around the world embraced regarding the taxation of generation, acquisition, holding and disposal of crypto assets. The choices made by the Serbian tax policy makers are juxtaposed to those applicable in comparative jurisdictions and, where appropriate, improvements are suggested. The author concludes by commending the recent trend in the application of Article 9, para. 1 of the Law on Tax Procedure and Tax Administration as a tool that could mitigate the need for recurrent and, ultimately, unsuccessful tailoring of the tax legislation to the novelties in the crypto domain.

The effects of macroprudential policies on house prices: Evidence from non-ordinary house purchasing policy using China real transaction data

This paper contributes to the international policy debate on the effect of macroprudential policy on housing prices. Our identification relies on the fact that ordinary housing and non-ordinary housing in Beijing face different loan-to-value (LTV) restrictions and transaction tax rates. This paper uses regression discontinuity (RD) design to test whether the differentiated regulation of ordinary housing and non-ordinary housing caused a discontinuous change in housing prices with house-level transaction data. We find that housing prices have a significant discontinuous decline at the cutoff point caused by macroprudential policy, which we take 140 square meters since it is the identification standard of non-ordinary housing. Further, we carry out RD-DID analysis to investigate the influence of loan-to-value (LTV) restrictions on housing prices. We find that around 2% decline in house prices is caused by credit policy.

Implementasi Pengelolaan PPH 21, PPH 22, dan PPH 23 di Dinas Pemberdayaan Masyarakat dan Desa Provinsi Riau

PPH ensures that every individual or legal entity that owns wealth contributes to the financing of the state, so that the tax burden is evenly distributed across society and supports economic stability and general welfare. This is achieved by ensuring that any taxable transactions are fairly and clearly assigned to domestic taxpayers or permanent establishments. In addition, it promotes financial stability. Riau Province's Community and Village Empowerment Office conducted this investigation. The study looked at the system and management of PPh 21, 22, and 23 tax burdens. It was conducted from June to July 2024. The Dinas's Financial Data Application (ADK) and Daily and Monthly Transaction Recapitulation (RTHA DTH) used observations, interviews, and instructions to collect data for this study. Preliminary data was also derived from a qualitative descriptive approach. Articles 22 and 23 of Income Tax provide BPKD with the tax payable from relevant transactions, such as the purchase of goods and services, in accordance with the provisions of the applicable tax regulations. This is done to support clear and reliable regional financial management and ensure compliance with tax obligations. Riau Province's Community and Village Empowerment Agency brings together PPH 21, 22, and 23. The reports are sent via DJP Online e-Filing. The purpose of this process is to ensure tax regulations apply to the income of the individual or company being taxed.

The legal nature of crypto assets and its reflection in the civil and tax legislation of the Russian Federation

The article analyzes the legal nature of crypto assets in Russian legislation and the specifics of their taxation, focusing on the need to form a legal framework that promotes effective protection of the rights of participants in the turnover of crypto assets.The methodological basis of the research is the dialectical method, the formal logical method, the formal legal method and the method of interpretation of law.The lack of a unified terminology base in the field of digital economy in Russian legislation creates additional difficulties in creating comfortable conditions for the development of the crypto asset market. Currently used various terms such as “virtual assets”, “digital assets”, “crypto assets”, “cryptocurrency” are not fixed in the current legislation. At the same time, the terms existing in Russian legislation do not allow for effective regulation in the field of taxation and civil turnover, since they intentionally exclude the most common crypto assets from their scope. Without clear and unambiguous legal regulation, it is difficult to ensure proper control and taxation of transactions with crypto assets, which can lead to significant tax losses and a decrease in budget revenues.Moreover, the concept of “digital currency” used in Russian legislation does not correspond to the generally accepted meaning in international practice and is mainly considered in an economic context, rather than in a legal one. Such a discrepancy in terminology creates additional difficulties for participants in the cryptocurrency market and creates obstacles to the formation of an effective legal framework for the regulation of the digital economy. According to the results of the study, it was concluded that the current approaches to the development of the terminological apparatus of the regulation of crypto assets have flaws, since they allow for a mixture of concepts and do not imply the formation of a clear hierarchy. The definition of “the digital asset” is proposed for the purpose of filling existing terminological gaps in the current legislation.

Sowing the Seeds of Financial Crises: Endogenous Asset Creation and Adverse Selection

Abstract What sows the seeds of financial crises, and what policies can help avoid them? I model the interaction between the ex-ante production of assets and ex-post adverse selection in financial markets. Positive shocks that increase market prices exacerbate the production of low-quality assets and can increase the likelihood of a financial market collapse. The interest rate and the liquidity premium are endogenous and depend on the functioning of financial markets as well as the total supply of assets (private and public). Optimal policy balances the economy's liquidity needs ex-post with the production incentives ex-ante, and it can be implemented with three instruments: government bonds, asset purchase programs, and transaction taxes. Public liquidity improves incentives but implies a higher deadweight loss than private market interventions. Optimal policy does not rule out private market collapses but mitigates the fluctuations in total liquidity.

Вопросы применения медианного значения рыночного интервала в регулировании трансфертных цен

Material changes in the tax regulation of transfer pricing have occurred in the early 2024, such changes include the introduction of the median value of the market price interval (financial parameters). This is a new instrument in the regulation of transfer pricing, its introduction was not justified in the bill discussion period, but its effect is significant for tax obligations of Russian companies. The new instrument in the transfer pricing system creates additional risks for taxpayers, as well as for the state in terms of economic relations with regard to timely and full calculation and payment of taxes, as well as for parties to international economic activities and internal relations. This predetermines the research subject: the conditions of and procedure for applying the median value for the purposes of tax control of intracompany transaction prices. The research methodology is based on an analysis of transfer pricing recommendations of the ОECD in АННОТАЦИИ Налоги № 2-2024 47 АННОТАЦИИ terms of applying statistical tools to determine the price of the transaction under analysis, provisions of foreign regulations that determine the pricing procedure in transactions between related entities. Special attention is paid to an analysis of foreign court judgments on determination of the market price of intracompany transactions. An analysis of the ОECD recommendations has given an opportunity to single out obligatory conditions for the application of the median value. The author has identified a tendency towards harmonization of approaches to using the median value in foreign countries and the general trend to clarifying regulations in 2022-2024. The judicial practice shows that irrespective of the activity type or type of transactions performed by group subdivisions, courts award uniform judgments in terms of applying the median value and take into account the ОECD recommendations when passing a judgment. The paper concludes that Russian taxpayers face an additional tax risk rooted in the differences in the approach towards the application of the median value in the Tax Code of the Russian Federation and the OECD Transfer Pricing Guidelines for transnational corporations and tax administrations used to regulate taxation of transactions between related entities in explanations of tax authorities and the judicial practice. The scientific novelty of the study lies in the determination of tendencies towards applying the median value for transfer pricing purposes, evaluation of tax consequences of the novelty for Russian taxpayers.

Goals, Effects and Challenges of the Financial Transaction Tax: A Comparative Law Study in France, Italy and Spain

The Preamble of the Spanish Financial Transactions Tax Law establishes that “[t]he shaping of the tax follows the line taken by our neighbouring countries, including France and Italy, thus contributing to greater coordination of these taxes across Europe.” In this sense, the Spanish tax shows important similarities with those established in France and Italy in relation to the levy on the acquisition of certain shares and securities representing the capital of a company for consideration. Nevertheless, both the French and the Italian taxes apply to other types of transactions, not covered by the Spanish Law, which is why it is necessary to carry out the corresponding comparative study. Furthermore, the effects that have arisen from the application of this kind of taxes to financial transactions merited a proper analysis in order to determine if the main goals pursued by these taxes have been achieved in an efficient way. In any case, there are emerging tax challenges in financial markets connected, on the one hand, to the use of crypto-assets and distributed ledger technology, and, on the other hand, to the implementation of artificial intelligence and machine learning and the fair taxation of these operations. In this sense, the Spanish tax presents important similarities with those established in France and Italy in relation to the levy of acquisition for consideration of certain shares and securities representing the capital of a company. Nevertheless, both the French and the Italian taxes subject other types of transactions, out of scope of the Spanish Law, which is why it is necessary to carry out the corresponding comparative study. Furthermore, the effects that have arisen from the application of this kind of taxes on financial transactions merited a proper analysis in order to determine if the main goals persuaded by theses taxes have been achieved in an efficient way. In any case, there are emerging tax challenges in financial markets connected, by the one hand, to the use of crypto-assets and distributed ledger technology; by the other one, to the implementation of artificial intelligence and machine-learning and the fair taxation of these operations.

Redemption of Shares or Stocks and Their Influence on Tax Obligation in Value Added Tax

The article presents the problem of taxation of value added tax and the remuneration in kind paid to a shareholder as a result of the redemption of shares. Settlements made between a company and a former shareholder may be considered a taxable transaction. Two opposing concepts found in the case law are to treat for tax purposes the redemption of shares with remuneration as a single transaction, or to separate only the phase of payment of remuneration for the redeemed shares and consider it a supply of goods for consideration. The practical importance of the issues raised is evidenced by the fact that these settlements often result in significant property flows. The purpose of the article is to try to demonstrate which of the existing concepts corresponds to the provisions of the law and the structural principles of the value added tax more closely.

Подходы к налогообложению операций с цифровыми финансовыми активами в иностранных юрисдикциях

The article analyses current approaches and mechanisms for taxation of transactions with crypto-assets in foreign jurisdictions, which are advanced in terms of the prevalence of crypto-assets among the population. The choice of the research object is due to the increasing role of such assets in Russia and around the world, as well as the need to develop current regulation in this area in Russia and analyse the possibility of adapting the most advanced and successful experience in Russian realities. The article presents an analysis of the current regulation in the field of taxation of transactions with crypto assets in foreign jurisdictions, reflects legislative gaps and problems faced by individuals and legal entities, and also sets out proposals as to the possibility of adapting foreign approaches in Russia. It was revealed that currently none of the analysed jurisdictions has an effective mechanism for taxation of transactions with crypto-assets, however, each of these jurisdictions has a unified approach formulated at the state level to determine the status of crypto-assets as an object of civil turnover and taxation, which allows market participants to develop this sector of the economy in the jurisdiction.

Adverse selection and search congestion in over-the-counter markets

Asymmetric information about both private valuations of assets and their quality gives rise to uncertainty over sellers’ motives of trade, allowing high-valuation holders of low-quality assets to engage in speculative trades that involve no allocative gains. When sellers compete to find buyers, such speculative behaviour not only dilutes the average quality of assets but also creates a welfare-detrimental congestion externality that lengthens the time on market for each individual seller. A market designer can mitigate the inefficiencies by imposing a transaction tax and, in the case of severe adverse selection, limiting market participation.

Taxation of digital financial assets in the context of classical rules of taxation

Subject. The existing mechanisms of taxation of transactions with crypto assets on the territory of the Russian Federation are analyzed in the article. The choice of the research object is due to the increasing role of crypto assets in the modern Russian economy, as well as the necessity to propose new mechanisms to ensure the tax security of the state in the face of new challenges.The purpose of the study. The existing mechanisms of taxation of transactions related to the use and turnover of crypto assets in Russia are considered. Authors analyze both the main problems faced by individuals and legal entities operating with cryptocurrencies. The analysis of the current legislation is provided, possible ways to improve the legislation are suggested.Methodology. In the course of their work, the researchers were guided by philological and systematic ways of interpreting current legal norms, as well as existing explanations of financial authorities related to current approaches to taxation of transactions with crypto assets.Conclusions. It is concluded that the approaches proposed by the legislator to taxation of transactions with crypto assets are similar to the mechanisms that apply to traditional financial instruments, but at the same time, assets that are not similar to traditional ones remain outside the regulation.

Foreign practice of regulatory and legal provision of taxation of transactions with cryptoassets and its significance for Ukraine

This article delves into the legal framework for taxing crypto asset operations to establish a theoretical platform for developing the legal basis for regulating virtual assets in Ukraine. The study aims to examine international experience in shaping the legal framework for the circulation of crypto assets within the general context of digitizing the financial system and developing an adequate taxation model for them in Ukraine. The following methods were used to solve the set tasks: analysis, synthesis, generalization, induction, analogy, modeling, and a systematic approach. The article examines international experience in shaping the regulatory and legislative framework for taxing crypto asset operations. The existing international classification of crypto assets is analyzed in the context of their effective taxation. The features of crypto assets that complicate the taxation of transactions with them are established. The differences in approaches to taxing cryptocurrency in individual European countries are noted, and the possibilities of taxing not only income from cryptocurrency transactions but also introducing VAT and sales tax are clarified. The processes of acquiring legal clarity and scientific validity regarding the taxation of individual categories of crypto assets are reflected. Given the high degree of anonymity of virtual assets, the first step towards effective rules for their taxation is to apply the rules for identifying and verifying the identity of beneficial owners and reporting requirements for third parties. It is emphasized that the taxation of crypto asset operations in Ukraine will prevent illegal operations with cryptocurrencies, promote the expansion of investment opportunities for the population and business, and ensure additional budget revenues. Considering that Ukraine is among the top five countries in terms of the share of cryptocurrency owners, the task of streamlining the domestic legal framework for the circulation of virtual assets, taking into account international experience, is extremely urgent. This will allow both to streamline their circulation and expand investment opportunities for businesses and the population during an unstable period of war, and ensure additional budget revenues.

Особенности налогообложения операций с цифровой валютой

The subject of the study is the taxation of transactions with digital currency. The objectives of the work are to establish the key features of taxation of transactions with digital currency in the Russian Federation, to determine approaches to making changes to regulatory legal documents. The relevance of the work is due to the accelerating development of digital technologies, in which the legislator does not have time to develop and adopt appropriate legislative acts. Based on the analysis of the legislation of the Russian Federation, draft laws, letters from the Ministry of Finance and the Federal Tax Service of Russia, program documents of the Bank for International Settlements, scientific publications of Russian and foreign researchers, the concepts of cryptocurrency, digital currency, digital financial assets, mining of cryptocurrencies for tax purposes have been clarified. The differences in the interpretations of the concepts of various types of digital assets according to the method of creation and the purposes of their use are highlighted. The features of taxation of transactions with digital assets in terms of value added tax, corporate income tax, and tax paid under the simplified taxation system are described. It is concluded that for the purposes of calculating VAT, digital currency can be qualified as property. Cryptocurrency should be defined as a digital currency. When mining cryptocurrencies using mining equipment that is actually located on the territory of the Russian Federation, the service for organizing the issuance of digital currency takes place on the territory of the Russian Federation. It is proposed to exclude contradictions in the definition of the law enforcement of new digital technologies in the country's economy from the legislation, which will allow subjects of foreign economic activity to use digital technologies in the legal field, without expecting possible negative legal consequences.

REGULATION OF CRYPTOCURRENCIES IN THE EU AND UKRAINE: CHALLENGES AND PROSPECTS

In Ukraine, the regulation of cryptocurrencies is still in the formative stage. Over the past few years, significant steps have been taken toward legalizing the cryptocurrency market, including the adoption of the "On Virtual Assets" law, which has been a crucial step toward regulating this segment of the financial market. However, despite considerable progress, challenges remain. It is necessary to ensure the harmonization of national legislation with international standards, which is essential for Ukraine's integration into the global financial system and for attracting investment. The development of cryptocurrencies and financial technologies has a significant impact on traditional financial systems. They open up new opportunities for investors and businesses by reducing the costs of financial transactions and increasing access to financial services. However, these innovations also create new challenges related to security, fraud, and maintaining financial stability. The growing popularity of cryptocurrencies forces regulators to adapt their approaches and implement new control mechanisms. Regulating cryptocurrencies in the EU and Ukraine is a complex and multifaceted process that requires consideration of financial stability, security, and regulatory requirements. On the one hand, EU countries strive to create a unified legal framework for cryptocurrencies that will ensure transparency and reliability in the market. On the other hand, Ukraine is taking its first steps toward regulating this new financial instrument, focusing on integrating with international standards and adapting to new challenges associated with the development of financial technologies. However, to succeed in regulating the cryptocurrency market, a number of key issues need to be addressed. One of the most important aspects is ensuring the proper protection of consumer and investor rights. This includes the implementation of effective mechanisms to protect against fraud, illegal financial transactions, and abuses related to cryptocurrencies. Another important issue is the taxation of transactions involving virtual assets, which requires government agencies to develop clear rules and procedures.

ПРАВОВЕ РЕГУЛЮВАННЯ ВІРТУАЛЬНИХ АКТИВІВ В УКРАЇНІ:ПЕРСПЕКТИВИ РОЗВИТКУ

This article examines the issues of regulation of the virtual assets market in Ukraine and examines thedevelopment of regulatory and legal regulation taking into account developments in foreign legislation. It was analyzed that Ukraine consistently occupies leading positions in terms of the level of development of the IT industry, including the number of cryptocurrency users. Attention is drawn to the fact that it is cryptocurrency that is becoming the most widespread. It was determined that the regulatory and legal regulation of the circulation of virtual assets in Ukraine is at the stage of initial formation and requires further improvement, namely the introduction of changes to the national legislation. An important area of legal regulation is also the need to develop a clear method of accounting for transactions with digital assets and taxation. It has been analyzed that thanks to the Law of Ukraine "On Virtual Assets" adopted on February 17, 2022, we have every chance to be a leading country for business development in this innovative field. However, this law never entered into force, as the Law of Ukraine "On Amendments to the Tax Code of Ukraine on the Features of Taxation of Transactions with Virtual Assets" has not yet been adopted.It is proposed to further improve the regulatory and legal framework, to continue scientific research in this field.

Platform Transaction Taxes and Freemium Pricing

Platform Transaction Taxes and Freemium Pricing

The Renewed Case for a Financial Transaction Tax

The Renewed Case for a Financial Transaction Tax

Taxing Composite Transactions

In a variety of contexts, taxpayers engage in composite transactions—essentially two transactions in one. For instance, when an individual sells property for less than its fair market value to a friend or relative, the transaction involves a sale and a gift. As another example, from time to time, retailers run promotions offering to rebate the price of merchandise if a team wins a sporting event. A buyer of the merchandise, effectively, makes a purchase and also places a bet on the sporting event’s outcome. Tax law’s treatment of composite transactions is not uniform. In some contexts tax law fully bifurcates these transactions into their separate components. Under this bifurcated approach, a taxpayer who engages in a composite transaction receives the same tax treatment as a taxpayer who goes through the motions of engaging in the component transactions separately. In other contexts, tax law adopts a collapsed approach under which taxpayers obtain markedly different tax treatment by engaging in a composite transaction instead of carrying out the components as separate transactions. In other contexts, tax law employs a hybrid approach that partially disentangles a composite transaction into its separate components but, nonetheless, bestows upon the composite transaction tax treatment that is not identical to what follows from engaging in the components as separate transactions. In addition to the existing approaches to composite transactions, other hypothetical approaches are possible. Each existing approach and each conceivable alternative offers various advantages and disadvantages when judged in terms of the approach’s propensity to reduce tax revenue, the approach’s tendency to trap unwary taxpayers while benefiting well-advised taxpayers, the likelihood that the approach will prompt taxpayers to alter their transactions for tax reasons, and the administrability of the approach. This Article undertakes an examination of composite transactions, evaluating advantages and disadvantages of different approaches. In addition, this Article presents new survey results that shed light on the counterintuitive nature of current law.

THE STUDY ОF VАLUE-АDDED TАX: KNОWLEDGE FRОM THE EU VАT EXPERIENСE АND UZBEKISTAN'S VАT SYSTEM

The complex structure of the Value Added Tax (VAT) system in the European Union is captured in the abstract. It describes important elements including taxable transactions, standard rates, and the credit-invoice method. The historical shift from fiscal borders to administrative restrictions is discussed, highlighting the need to strike a careful balance between a consumption tax based on destination and a single internal market. In business-to-business transactions, mechanisms like the reverse charge technique and standardized identifying numbers are implemented. The abstract makes mention of several new difficulties that may arise, such as the complexity of place-of-taxation laws and the possibility of false refund claims. All in all, it gives a clear synopsis of the complex EU VAT system, including information on its composition and changing dynamics.

State tax control in the context of digitalization

Subject. The article investigates information services and resources used by tax authorities during tax control. Objectives. The purpose is to assess the impact of the latest digital technologies on the efficiency and effectiveness of tax control, through description of the main possibilities of digitalization and identification of its current status. Methods. The study rests on provisions of modern economics describing the impact of digital processes on the development of the society and the State, including the improvement of methods and tools of State tax control. Results. We examined the latest digital technologies used in the activities of tax authorities, which simplify the processes of tax control and increase their efficiency. The analysis showed that the automation of tax control processes did not increase the effectiveness of inspections, but had an impact on their quality, which affected the amounts of additional charges per audit. Furthermore, it facilitated the process of collecting and processing information by the tax authority, and interaction with taxpayers. The study enables to state a high level of productivity of tax control in conditions of digitalization of taxation in Russia. Nevertheless, there are prospects for further improvement in this area, which will extend the high productivity of tax control, including to individual taxpayers. Conclusions. Today, promising areas for tax control development through digital technologies include the use of digital ruble's capabilities in controlling the income and expenses of individuals and taxation of transactions in cyberspace.