Modern trends in corporate income taxation: perspectives of the withdrawn capital tax

Viietska, Olesia V.

doi:10.15407/econindustry2018.02.024

Cited by 4 publications

(1 citation statement)

References 23 publications

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“…According to this system, the distributed profit is recognized as the object of profit taxation, and the undistributed profit is taxed at a zero rate. Profit distributions may be specific (i. e. dividends, share buybacks or profit distributions via capital reductions) or deemed (which include expenditure and payments unrelated to business activities, as well as gifts and donations) 5 . The object of taxation is collected at the time of the distribution from Estonian companies and paid by the person carrying out this withholding (payer).…”

Section: Estoniamentioning

confidence: 99%

Abolishment of Proft tax Effects in the Republic of Armenia

Sandoyan

Petrosyan

2019

jour

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Problems in tax administration, especially direct taxation, are one of the most important challenges for the taxation system of Armenia. The high level of the informal sector further affects the effective functioning of the system and the replenishment of the state budget. In this regard, there is a need for reforms in direct taxation presented in this article. The research objective is to evaluate possible effects of abolishment of profit tax in the Armenian economy. For this purpose, we approached the neoclassical dynamic general equilibrium model presented in expanded form and in discrete time. Impact assessment of the reforms in corporate taxation system in Estonia and Georgia was also based on the same model. Therefore, after the effects of the abolishment of profit tax in the Armenian economy are assessed, a comparative analysis of the results observed with those of Estonia and Georgia will be conducted. The model calculates the effect of changes in income tax rates on government revenues, capital per unit of labor, level of consumption and output in the country. The article also presents the parameterization of the model considering the specifics of the Armenian economy. The study has revealed that reforming the taxation system for organizations in Armenia will lead to an increase in the general welfare of the population, net investments and aggregate output. At the same time the tax revenues of the state budget of Armenia will decrease by 3.92%. The results of the study will allow the government of Armenia to apply a new approach to taxing the profits of organizations. It will lead to an increase in the transparency of business, a decrease in the level of corruption and the concealment of the profits. Keywords: traditional income tax model; Estonian income tax model; income tax; tax avoidance; neoclassical dynamic general equilibrium model; taxation system of Armenia For citation: Sandoyan E. M., Petrosyan H. G. Abolishment of profit tax effects in the Republic of Armenia. Finansy: teoriya i praktika = Finance: Theory and Practice. 2019;23(1):96-105. АННОТАЦИЯПроблемы в налоговом администрировании, особенно в части прямого налогообложения, являются одним из важнейших вызовов для системы налогообложения Армении. Наличие высокого уровня неформального сектора еще больше влияет на эффективное функционирование системы и пополнение государственного бюджета. В связи с этим возникает необходимость проведения реформ в прямом налогообложении, что представлено в данной статье. Цель работы -оценка последствий отмены налога на прибыль в Армении с помощью неоклассической динамической модели общего равновесия и обложения распределенных дивидендов подоходным налогом. Представленная модель применяется и в оценках воздействия реформирования системы налогообложения организаций в Эстонии и Грузии. В связи с этим в статье проводится сравнительный анализ полученных результатов трех стран. Модель рассчитывает влияние изменения в ставках налога на прибыль на государственные доходы, капитал на единицу труда, уровень потребления и...

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Section: Estoniamentioning

confidence: 99%

Abolishment of Proft tax Effects in the Republic of Armenia

Sandoyan

Petrosyan

2019

jour

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Perspectives of taxing an income from digital goods and services’ sales in Ukraine

Viietska

2019

Ekon. promisl.

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Problems and the future of corporate income tax and VAT in the conditions of digitalization

Garkushenko

Kuvaldina

2021

Ekon. promisl.

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Globalization and digitalization lead to significant changes in society and economy, including the field of taxation. Moreover, the efforts of governments of many countries are aimed at implementing measures to combat profit shifting and ensure that budget revenues from corporate income tax and VAT are received in the proper amount. The article analyses main problems of corporate income tax and VAT, possible ways to solve them in near and distant perspectives. With regard to respective taxes, the main aspects of combating tax base erosion and tax evasion with the use of new digital methods, and the state of BEPS steps implementation in this part are analysed. Given that the corporate income tax in modern conditions has a number of disadvantages, it is likely that in the future it will be replaced by an alternative – a tax on withdrawn capital or a tax on cash flows at destination. VAT, in turn, is a neutral tax that is easy to algorithmize and administer. Therefore, it can also displace corporate income tax from the tax systems of countries. At the same time, there are a number of problems with VAT: cases of fraud, non-taxation or double taxation of transactions in international trade. It has been found that in the short run (up to 5 years) it is important for national governments to increase efforts to implement BEPS plan and to strengthen information exchange and international cooperation to counteract base erosion and profit shifting. To simplify VAT administration and improve the interaction between taxpayers and tax authorities within the same country, as well as in international trade, it is feasible to use the e-invoicing practice more widely. In distant perspective, it is possible to use blockchain technology. Taking into account global trends, the article provides recommendations for improving VAT and corporate income tax in the context of globalization and digitalization (in particular – further implementation of BEPS measures in all countries of the world, mandatory registration as VAT payers in jurisdictions, where sells of goods and services to end users take place, strengthening international coordination and cooperation in the field of taxation), as well as general recommendations that should contribute to digitalization and economic development of Ukraine in the near and distant future.

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Modern trends in corporate income taxation: perspectives of the withdrawn capital tax

Cited by 4 publications

References 23 publications

Abolishment of Proft tax Effects in the Republic of Armenia

Abolishment of Proft tax Effects in the Republic of Armenia

Perspectives of taxing an income from digital goods and services’ sales in Ukraine

Problems and the future of corporate income tax and VAT in the conditions of digitalization

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