A special feature of corporate income taxation in Portugal: the autonomous taxation of expenses

2017 ◽  
Vol 59 (4) ◽  
pp. 489-503
Author(s):  
Ana Dinis ◽  
António Martins ◽  
Cidália Maria Lopes
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Effective Rate ◽  
Corporate Taxation ◽  
Tax Revenue ◽  
Constitutional Court ◽  
Content Type ◽  
Advantages And Disadvantages ◽  
Constitutional Principle

PurposeThe purpose of this paper is to discuss the following research questions: Is the Portuguese corporate income tax (CIT) losing its internal consistency by extending the autonomous taxation of expenses (ATE)? Are receipts derived from autonomous taxes so relevant that what began as an exception is gradually becoming a permanent feature of the income tax? Given the constitutional principle that corporate taxation should be fundamentally based on income, is the taxation of expenses unconstitutional? Is Portugal an international outlier, in applying this type of taxation to corporate expenses? Design/methodology/approachThe methodology used in the paper is a blend of legal research method and case study analysis. The interpretation of legal texts and the ratio legis discussion (hermeneutical side), the evaluation of advantages and disadvantages of autonomous taxes (argumentative approach) and the use of aggregate data to gauge an impression of autonomous taxes’ impact on global tax receipts (empirical side) will, jointly, be used to analyse the topic. Autonomous taxation is a case study on how a (albeit distortive) solution is being applied in an European Union (EU) country to significantly enhance corporate-related tax revenue. FindingsThe authors conclude that autonomous taxation is a relevant source of revenue and its elimination is not foreseeable, at least in the medium term. Moreover, the extension of the tax base is gradually transforming CIT in a kind of dual tax, by charging profits and some expenses. The Constitutional Court, stressing the equity principle, has not ruled autonomous taxation unconstitutional, invoking usefulness against tax evasion. Finally, with the exception of some Portuguese-speaking countries, no other comparable international experience is observed. Practical implicationsThe autonomous taxes (ATE) and its progressive enlargement imply, on the one hand, that the CIT has been slowly, but inexorably, losing its sole purpose of taxing profits, and imposing a tax penalty on an increasing set of accounting expenses. On the other hand, the growing number of expenses subjected to taxation leads some authors to ponder if the Portuguese tax regime is losing attractiveness. By increasing ATE’s scope, the effective rate tends to move upwards, countering reductions in the statutory rate. Finally, tax law will increasingly influence managers’ daily decisions, given the set of expenses targeted by autonomous taxes. Originality/valueTaking into account the aim of this study, the discussion of a Portuguese particular feature of corporate taxation can highlight useful policy points to a broader audience. Many Organization for Economic Cooperation and Development (OECD) countries face a dire situation in public finances. Therefore, given the pressure to increase tax receipts, the ATE can be a case study on how a (albeit distortive) solution is being applied in an EU country to significantly enhance corporate-related tax revenue.

Application of the constitutional principle of generality in Spanish companies’ taxation. A compared study to Portugal

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Susana Cristina Rodrigues Aldeia
Keyword(s):  
Income Tax ◽  
Constitutional Court ◽  
Tax System ◽  
Public And Private ◽  
Content Type ◽  
Constitutional Principle ◽  
Tax Exemptions ◽  
Tax Benefits ◽  
The Difference ◽  
Generality Principle

Purpose This paper aims to analyse how constitutional law and corporate income tax (CIT) law, in the Iberian Peninsula, addresses the tax justice principle of generality. Also, it has as an intention to understand the dimension of tax exemptions predicted in the CIT law of both countries. Design/methodology/approach It analyses several data sources from Spain and Portugal, between them constitutions laws, CIT laws, general tax laws and some constitutional court cases. Furthermore, it uses the content analysis method to identify the level of exemptions and tax benefits present in the CIT law. Findings The results show that constitutional laws reserve a section to regulate tax issues, that it can present major or minor development. The Spanish article 31 explains the tax system and the Portuguese articles of 103 and 104 explain not only the tax system but also gives instructions about how must occur income, property and consumption taxation. Both jurisdictions, do not refer expressly to the generality principle, nevertheless, it has an implicit presence in the Supreme law and the same happen in the CIT law. They predict that all legal entities, public and private ones, have to contribute to financing the public expenditure. Furthermore, the respect to generality principle implies that tax income exemptions have to be justified, otherwise it can configure a break of the researched fundamental. In researched cases, the Spanish CIT have present more tax exemptions than Portugal, which can lead to consider a relation between the level of corporate contribution to income tax revenues collection and the tax exemptions predicted in the CIT law. Originality/value It allows understanding the difference between tax jurisdictions in the tax principles domain.

Macroeconomics of money laundering: effects and measurements

2017 ◽  
Vol 24 (1) ◽  
pp. 65-81 ◽  
Author(s):  
Nella Hendriyetty ◽  
Bhajan S. Grewal
Keyword(s):  
Developing Countries ◽  
Money Laundering ◽  
Tax Evasion ◽  
Developed Countries ◽  
Tax Revenue ◽  
Negative Effects ◽  
Policy Makers ◽  
Content Type ◽  
Macroeconomic Conditions ◽  
Illicit Flows

Purpose The purpose of this paper is to review studies focusing on the magnitude of money laundering and their effects on a country’s economy. The relevant concepts are identified on the basis of discussions in the literature by prominent scholars and policy makers. There are three main objectives in this review: first, to discuss the effects of money laundering on a country’s macro-economy; second, to seek measurements from other scholars; and finally, to seek previous findings about the magnitude and the flows of money laundering. Design/methodology/approach In the first part, this paper outlines the effects of money laundering on macroeconomic conditions of a country, and then the second part reviews the literature that measures the magnitude of money laundering from an economic perspective. Findings Money laundering affects a country’s economy by increasing shadow economy and criminal activities, illicit flows and impeding tax collection. To minimise these negative effects, it is necessary to quantify the magnitude of money laundering relative to economic conditions to identify the most vulnerable aspects of money laundering in a country. Two approaches are used in this study: the first is the capital flight approach, as money laundering will cause flows of money between countries; the second is the economic approach for measuring money laundering through economic variables (e.g. tax revenue, underground economy and income generated by criminals) separately from tax evasion. Originality/value The paper offers new insights for the measurement of money laundering, especially for developing countries. Most methods in quantifying money laundering have focused on developed countries, which are less applicable to developing countries.

scholarly journals Addressing local government issues in the practice of the Constitutional Court of the Russian Federation during the implementation of municipal reform in Russia

2020 ◽  
Vol 6 (2) ◽  
pp. 133-147
Author(s):  
Aleksey Andreevich Amiantov
Keyword(s):  
Russian Federation ◽  
Descriptive Analysis ◽  
Constitutional Court ◽  
Local Authorities ◽  
Constitutional Principle ◽  
Municipal Reform ◽  
The Russian Federation ◽  
Regional Authorities ◽  
Legal Consequences

The presented study is devoted to the study of the practice of the Constitutional Court of the Russian Federation in relation to issues of local self-government in the context of the municipal reform of 2014-2015. and its legal consequences. The aim of this work is to carry out a comprehensive assessment of the practice of the Constitutional Court of the Russian Federation on the identified problems of the work of local authorities in the period following the start of municipal reform. The research methodology is built by combining descriptive analysis elements and a case study. It is concluded that the Constitutional Court of the Russian Federation has consistently maintained its position on the constitutional nature of the reform of local authorities. The provisions of the relevant regulatory legal acts are limited only partially and only in relation to first-level municipalities - municipal authorities of settlements. Given the deprivation of the latter a significant part of the powers and the observed transition to a singlelevel system of local self-government, the adoption of these restrictions does not significantly affect the implementation of the reform. Of fundamental importance is the position of the Constitutional Court of the Russian Federation regarding the new powers of regional authorities in relation to municipalities. The increase in the arsenal of legal instruments of the influence of the leadership of the constituent entities of the federation on the heads of local self-government was not interpreted as a violation of the constitutional principle of the independence of municipalities. The latter opens up the possibility for further legalization of the process of embedding municipal bodies in the structure of the informal “power vertical”.

Staffing with students

2018 ◽  
Vol 34 (1) ◽  
pp. 32-44 ◽  
Author(s):  
Naomi Skulan
Keyword(s):  
Undergraduate Student ◽  
Academic Library ◽  
Volunteer Work ◽  
University Of Minnesota ◽  
Content Type ◽  
Advantages And Disadvantages ◽  
Volunteer Labor ◽  
Student Volunteer ◽  
Student Volunteers

Purpose The purpose of this paper is to examine the advantages and disadvantages to primarily utilizing undergraduate student volunteers for a long-term digitization project and to discuss methods to mitigate the disadvantages of student volunteer work. Design/methodology/approach This paper presents a case study of the use of student volunteers for the Historical Campus Newspaper Digitization Project at the University of Minnesota, Morris. Findings This paper describes the process of recruiting, training and managing student volunteers for a digitization project. Both advantages and disadvantages to student volunteer work are discussed, including possible steps to mitigate the disadvantages of student volunteers. Research limitations/implications This paper is limited to one institution’s experience utilizing student volunteers on one digitization project. Practical implications Librarians and archivists interested in new staffing methods for digitization projects can utilize this paper to better understand the benefits and costs to student volunteer labor before putting volunteer projects into practice. Originality/value This paper presents a unique case study of a digitization project staffed primarily with undergraduate student volunteers in an American academic library and archive.

scholarly journals Tax evasion and financial instability

2020 ◽  
Vol 27 (2) ◽  
pp. 531-539
Author(s):  
Peterson K. Ozili
Keyword(s):  
Tax Evasion ◽  
Exploratory Study ◽  
Financial Stability ◽  
Design Methodology ◽  
Tax Revenue ◽  
Financial Instability ◽  
Financial Systems ◽  
Content Type

Purpose The purpose of this paper is to explore the association between tax evasion and financial instability. The discussion also examines the effects of tax evasion for financial instability. Design/methodology/approach This paper is an exploratory study on the effect of tax evasion on financial instability Findings The paper shows that tax evasion can reduce the tax revenue available to governments to manage the economy and can weaken the government’s ability to promote stability in financial systems, whereas on the contrary, taxpayers who evade taxes feel they can use the evaded tax money to rather improve their own financial stability. Originality/value This paper presents the first attempt to carefully examine the association between tax evasion and financial instability.

scholarly journals Inequality in tax evasion: the case of the Spanish income tax

2020 ◽  
Vol 28 (83) ◽  
pp. 89-109
Author(s):  
Sara Torregrosa-Hetland
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Sample Selection ◽  
Composition Effect ◽  
Content Type ◽  
Top Incomes ◽  
Self Employment ◽  
Real Value ◽  
Measurement Of Inequality ◽  
Income Concentration

Purpose The purpose of this paper is to estimate tax evasion and its impact on progressivity, redistribution and the measurement of inequality, using microdata from the Spanish income tax for 2001-2004. Design/methodology/approach The approach follows Feldman and Slemrod (2007) by exploiting the relation of charitable donations with the composition of income but introduces two methodological innovations, which could be useful for further studies: correction for sample selection with a Heckman two-step setting and the calculation of different evasion rates for top incomes with an interaction term. Findings Evasion in capital incomes was significant throughout these years. Financial incomes were reported at around 50-70 per cent of their real value, with the lowest estimates corresponding to the top decile. Revenues from fixed capital display similarly low compliance rates for the top 10 per cent. Tax evasion in self-employment incomes (direct assessment) is estimated at 20 per cent for 2001. Mostly because of a composition effect, this means that fraud was higher at the top of the income distribution, thus having a regressive impact. Inequality statistics and top income concentration estimates should, therefore, be revised upwards. Originality/value This is the first paper to estimate the distributive impacts of tax evasion in Spain, and one of very few internationally.

Enhancing competitiveness through MNC-local firms co-opetitive relationships

2014 ◽  
Vol 4 (8) ◽  
pp. 1-6
Author(s):  
Audrey Catherine Depeige ◽  
Stavros Sindakis
Keyword(s):  
Market Share ◽  
Business Strategy ◽  
Low Cost ◽  
Strategy Management ◽  
Strategic Decision ◽  
Competitive Intelligence ◽  
Growth Strategies ◽  
Content Type ◽  
Advantages And Disadvantages

Subject area The case study reflects issues and challenges in the fields of strategy, management, competitive intelligence and new organizational designs. Study level/applicability The case study is recommended for MBA and postgraduate courses in strategy, management, competitive intelligence and new organizational designs. The case can also be used in executive development programs focusing on business strategy and innovation. Case overview It is 2009. LK Company has newly been established as lighting products manufacturer. Based in Thailand, the firm commences its business operations with an aggressive pricing strategy (low-cost products). At the time of the establishment and launch of operation activities, the market leader [an international multinational company (MNC)] has above 35 per cent market share, leaving LK with an initial 2 per cent market share. While the share of LK grew from 2 to 10 per cent in the past five years, competition in the industry nevertheless remains harsh. Companies are confronted with pressures to invest in the development of new energy-saving lamps, and in this context, LK's company executive board needs to make a strategic decision on which way to follow to sustain the business: shall this be with or without foreign MNCs. Expected learning outcomes Students will be able to better understand; analyze and assess the importance of resource management in highly competitive environments, as well as the importance of designing alternative growth strategies by identifying and assessing changes in the market/environment. They are introduced to characteristics of co-opetition strategies, advantages and disadvantages of co-opetitive business structures and impact of the choice of business partners over time. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes.

Baltic shells: on the mechanics of trade-based money-laundering in the former Soviet space

2015 ◽  
Vol 18 (1) ◽  
pp. 81-98 ◽  
Author(s):  
Graham Stack
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Court Cases ◽  
Content Type ◽  
Soviet Space ◽  
Tax Fraud ◽  
The Baltic ◽  
Practical Implications ◽  
Post Soviet Space

Purpose – The purpose of this paper is to describe a platform of interconnected international shell companies operated through Baltic banks, used for trade-based money laundering (TBML) across Russia, Ukraine and other post-Soviet states. Design/methodology/approach – This is a case study that draws extensively on the results of journalist investigations and court cases to describe one example of a money-laundering platform. Findings – Platforms of international shell companies operated through Baltic banks play a key role in TBML for the post-Soviet countries. They are created for systematic laundering of revenues from tax evasion, tax fraud, corruption and criminality across the post-Soviet space, and also globally. Research limitations/implications – This study implies that TBML for the post-Soviet space is a specialized industry, hosted by collaborating banks centered in the Baltic states, in conjunction with mass use of international shell companies. Practical implications – This study implies that analysis of suspicious transactions cannot remain on the level of single companies but has to take into account the interconnected payment patterns produced by such a platform. Originality/value – Provides the first study of a trade-based money-laundering platform operating in the post-Soviet space.

scholarly journals Withholding System PPh Pasal 23 Menggunakan Microsoft Visual Basic.Net

2018 ◽  
Vol 4 (1) ◽  
Author(s):  
Suhartono Suhartono ◽  
Abdul Hamid ◽  
Rame Santoso
Keyword(s):  
Human Resources ◽  
Tax Evasion ◽  
Income Tax ◽  
National Development ◽  
Third Parties ◽  
The State ◽  
Financial Resources ◽  
Tax Revenue ◽  
The People ◽  
State Finance

ABSTRACT - Sustainable national development from year to year to improve the lives and welfare of the people, requires the support of human resources, natural resources and huge financial resources. There are many financial resources that can be obtained by the state, one of them through taxes. Article 23 Income Tax as a source of state finance has problems in the process of cutting, depositing and reporting. An error occurring in the process may result in a deficiency in the amount of tax that should be deposited into the state treasury so as to prejudice and reduce state revenues. One method for managing tax payable taxpayers in order to enter the state treasury is to use the withholding system, in which the state authorizes third parties to deduct or levy the amount of tax payable by the taxpayer. There are many examples of cases that occur in tax evasion, where taxpayers pay little of their obligations to tax elements to enrich themselves and only a few are deposited into the state treasury. It takes good coordination and cooperation between related institutions and agencies so that leakage and tax evasion can be eliminated so that tax revenue can be increased. Keywords: Withholding, System, PPh, Article 23, Visual Basic.Net

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