Competition in Business Taxes and Public Services: Are Production-Based Taxes Superior to Capital Taxes?

Gugl, Elisabeth; Zodrow, George R.

doi:10.17310/ntj.2015.3s.03

Cited by 5 publications

(3 citation statements)

References 31 publications

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“…-the risk of financial losses related to the interpretation of legislation by regulatory authorities and a taxpayer (Gugl, 2015); -the risk of additional tax charges, imposing penalties, fines resulting from a dispute and refusal by the regulatory authorities of the reimbursement of value-added tax (full name); -the risk of financial losses arising from office and field tax audits (Gennaioli, 2015); -the risk of irrational actions of officials responsible for the control and management of tax obligations (Morkovina, 2018).…”

Section: Discussionmentioning

confidence: 99%

Targets determination model for VAT risks mitigation at B2B marketplaces

Akhmadeev¹,

Morozova²,

Voronkova³

et al. 2019

JESI

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The objective of the study is to assess practical requirements for VAT implementation in relation to B2B e-commerce participants for the development and practical implementation of target determination model, considering the mitigation of tax risks associated with transactions on digital marketplaces, taking into account data disclosure upon corporate reporting submission. It was determined in the course of scientific and practical study of the specifics of implementation and payment of indirect taxes, that there is no general methodological approach to indirect taxation of international services accomplishment in the field of B2B e-commerce, due to the differences in the indirect taxes applied: VAT or retail tax. In this regard, the hypothesis is proposed that the provision of optimal tax conditions for electronic marketplaces to a considerable degree is fraught with the shift in business opportunities towards B2B transactions in tax jurisdictions, providing equal conditions for non-residents. In terms of international practice, the study is of significant interest as the experience of introduction of VAT implementation and payment in relation to B2B operations, VAT-exempt transactions, given that the tax and regulatory system of the jurisdiction under study is assessed as a system with increased business risks. The above calculations showed that B2B non-resident is in unequal conditions compared to the taxpayers of a particular jurisdiction, and the difference in the calculated VAT value is significant. However, the introduced obligation to pay VAT has not provoked the non-residents to move to the e-commerce marketplace of other tax jurisdictions. The risk zones identified during the study determined the essential need to build an optimal model on digital marketplaces, which, in our opinion, can be the basis for the development of the targets for mitigation of the tax risks associated with VAT payment on B2B marketplaces. In our opinion, the proposed model is universal for all business management systems and applied ERP systems, taking into account the provision of all parties in B2B transactions with access to information. According to the results of the study, it was determined that the disclosure of information on B2B operations, indirect taxes and tax risks in corporate reporting is not imputed by the regulators and has a largely inconsistent and unstructured nature. In this regard, any proactive disclosure in corporate public reporting on B2B is possible only if the company treats the information requests from external users as significant, taking into account the calculation of the cost of preparation of the information, which does not exceed the expected effects.

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Section: Discussionmentioning

confidence: 99%

Targets determination model for VAT risks mitigation at B2B marketplaces

Akhmadeev¹,

Morozova²,

Voronkova³

et al. 2019

JESI

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“…to Capital Taxes? (Gugl and Zodrow, 2015) Many public services benefit businesses rather than residents. In this case, should state and local business taxes be based on production or the amount of capital that is utilized by the firm?…”

Section: Competition In Business Taxes and Public Services: Are Produmentioning

confidence: 99%

“…In this case, should state and local business taxes be based on production or the amount of capital that is utilized by the firm? Gugl and Zodrow (2015) explore how the provision of business public services is affected by the use of capital taxes and production taxes with tax competition. In a model where public services are provided to businesses, the authors show that the level of provision depends critically on the nature of the production function -how the marginal productivity of capital is affected by the public service.…”

Section: Competition In Business Taxes and Public Services: Are Produmentioning

confidence: 99%

Competition and Subnational Governments: Tax Competition, Competition in Urban Areas, and Education Competition

Agrawal¹,

Fox²,

Slemrod³

2015

National Tax Journal

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Competition at the subnational level concerns how jurisdictions set tax, spending, or regulatory policies while accounting for the fact that these policies affect the locations of individuals, firms and mobile factors. This paper highlights the importance of studying subnational competition and then places the field of fiscal competition in the context of the broader public economics literature. We argue that studies of competition at the state and local level should extend beyond traditional issues relating to tax competition and must consider how many different agents respond to policies. The paper then summarizes the six papers in this special issue, which were presented at a conference on subnational competition.

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A note on production taxation and public-input provision

Matsumoto

Sugahara

2017

Ann Reg Sci

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Competition in Business Taxes and Public Services: Are Production-Based Taxes Superior to Capital Taxes?

Cited by 5 publications

References 31 publications

Targets determination model for VAT risks mitigation at B2B marketplaces

Targets determination model for VAT risks mitigation at B2B marketplaces

Competition and Subnational Governments: Tax Competition, Competition in Urban Areas, and Education Competition

A note on production taxation and public-input provision

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