scholarly journals Low-Tax Jurisdictions in International Tax Planning

2021 ◽  
Vol 9 (3) ◽  
pp. 137-162
Author(s):  
Natalia Andrianova
Keyword(s):  
Tax Evasion ◽  
Multinational Enterprises ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Global Trends ◽  
National Legislation ◽  
Global Trend ◽  
International Tax ◽  
Definition Of ◽  
Financial Transactions

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.

TAX PLANNING: PRACTICAL PROBLEMS OF IMPLEMENTATION

2017 ◽  
Author(s):  
Tetiana Shulha ◽  
◽  
Kateryna Khaletska ◽  
Keyword(s):  
Tax Evasion ◽  
Tax Avoidance ◽  
Tax Compliance ◽  
Tax Planning ◽  
Planning System ◽  
Corporate Management ◽  
Tax Management ◽  
Basic Approaches ◽  
The One ◽  
Definition Of

The article has investigated scientific achievements of scientists, who studied the issue of "tax planning" in the system of tax management at an enterprise. The basic approaches to definition of essence of tax planning in the system of corporate management of an enterprise are established. The article has given its own definition of "tax planning". It has ascertained that one of the important elements of tax compliance at the enterprise is tax planning and has substantiated the necessity of its introduction. The article also has defined the main objectives of tax planning. The necessity of introduction of planning is connected to its ability to prevent delinquencies in the sphere of taxation, define losses the enterprise may incur in payment of taxes, determine optimal ways of enterprise activity and etc. The article has described the main levels of planning - strategic, current, operational, and identifies tasks at each of them. Types of tax planning and their peculiarities are established and investigated. The conclusion about the relevance and necessity of the use of tax planning system by the enterprise for its successful functioning is made. It has proved the expediency of creation of special structural subdivisions and engagement of separate specialists for realization of tax planning functions at the enterprises. The article has defined practical problems of implementation of tax planning in an enterprise to which the one can refer: absence of legislative regulation, confusion of notions of "tax planning" with notions of "tax evasion" and "tax avoidance", implementation of aggressive tax planning in an enterprise, inexperience of governing bodies of economic entities and/or their neglect of tax planning. Ways of solving these problems that have developed in practice include defining tax planning, its system, principles, methods and techniques at the level of law, and improving its organizational, informational and methodological support in the enterprise.

scholarly journals The Use of International Tax Planning in Subsidiaries from the Financial and ICT Sectors in the Czech Republic

2021 ◽  
Vol 24 (1) ◽  
pp. 182-196
Author(s):  
Vít Jedlička
Keyword(s):  
Global Economy ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Tax Burden ◽  
Effective Tax Rate ◽  
Tax Havens ◽  
Tax Rate ◽  
Dummy Variable ◽  
International Tax

Tax avoidance is an important element of management in the global economy. Managers use tax havens for reducing a company’s effective tax rate. The most common practices in international tax planning can be divided into three groups: loans and their related interest, royalties, and transfer pricing. The aim of this article is to find the determinants of the tax burden faced by foreign-owned subsidiaries. Therefore, a model was created for the tax burden, focusing on the special position of subsidiaries within international tax planning. For this purpose, taxes/outcomes was established as a new dependent variable. The panel data used include Czech companies that are owned by parent companies located in other EU countries. The model distinguishes EU tax havens from regular member states; sector dummy variables are also included. The regression model that was created did not confirm the assumed dependencies. Rather, it indicated other important determinants: profitability, the share of intangible assets, size, and the dummy variable for the ICT sector. Based on the regression results, the independent variables connected with known tax planning schemes have relatively low importance. The significance of these results can be seen in the subsequent conclusions. First of all, there is no difference between the subsidiaries’ tax burdens based on the parent company’s location. Corporations use international tax planning whether or not they are owned from a tax haven. The second significant conclusion indicates the importance of certain sectors and their attributes concerning the tax burden. Companies from the ICT sector are linked to a lower tax burden. On the other hand, the dependencies within the financial sector are not statistically significant. From the perspective of further research, it would be constructive to incorporate the subsidiary’s position within the group.

Demarcation Between the Concepts of Tax Evasion, Tax Planning and Aggressive Tax Planning in the Russian and Foreign Practice

Financial law ◽  
2021 ◽  
Vol 1 ◽  
pp. 32-36
Author(s):  
Natalya G. Andrianova ◽  
Keyword(s):  
Tax Evasion ◽  
Information Exchange ◽  
Multinational Enterprises ◽  
Legal Framework ◽  
Tax Planning ◽  
Tax Revenue ◽  
Public And Private ◽  
Private Interests ◽  
Border Trade ◽  
The Russian Federation

One of the main consequences of globalization is development of cross-border trade of goods, work and services, emergence of multinational enterprises operating on the territory of two or more jurisdictions. Taxation of multinational enterprises is always controversial taking into consideration seeking of balance of public and private interests which involves taxpayer’s desire to decrease the amount of payable taxes and reverse governmental interest in obtainment of the full amount of the tax revenue. The article covers and differentiates the main models of taxpayer’s behavior aimed at reducing the amount of payable taxes: tax evasion, tax planning and aggressive tax planning, the harm caused by these activities to governmental budget revenues. The article deals with Russian and foreign legal framework and practice of each of the abovementioned legal phenomenon, highlighted the necessity of statutory recognition in the Russian Federation of the term “tax planning” and its principles to define its limits clearly. The article outlines different approaches to the term “aggressive tax planning” and the limits of this term, importance of cooperation among jurisdictions and information exchange to detect and give appropriate legislative and administrative responses for aggressive tax planning schemes.

How Countries Should Share Tax Information

2019 ◽  
pp. 303-322
Author(s):  
Arthur J. Cockfield
Keyword(s):  
Human Rights ◽  
Transaction Costs ◽  
Tax Evasion ◽  
Academic Support ◽  
Tax Planning ◽  
High Quality ◽  
Financial Flows ◽  
Optimal Outcomes ◽  
Illicit Financial Flows ◽  
International Tax

This chapter looks at exchange of information (EOI) policies, proposing several ways to make EOI policies fairer and more efficient, so as to maximize their potential to reduce illicit financial flows and curb abusive tax practices that undermine human rights. While there appears increasing policy and academic support for EOI initiatives that promote global financial transparency, the current international tax regime, with its high transaction costs for taxpayers and tax authorities, does not seem particularly amenable to producing optimal outcomes. The chapter then emphasizes how, to promote enforceability, the ideal EOI system delivers high-quality tax information while providing needed legal protections for taxpayer privacy. The exchange and usage of high-quality tax information would reduce transaction costs for tax authorities as they could more readily identify taxpayers engaged in offshore tax evasion and aggressive international tax planning.

scholarly journals Analyzing and Formulating a Statutory General Anti-Avoidance Rule (GAAR) in Indonesia

2020 ◽  
Vol 15 (1) ◽  
pp. 35
Author(s):  
Suparna Wijaya ◽  
Dewi Sekarsari Kusumaningtyas
Keyword(s):  
Qualitative Research ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Case Study Approach ◽  
Study Approach ◽  
International Tax

Dealing with the practice of tax avoidance in general, many countries have compiled and implemented their own general anti-avoidance rules (GAAR). This research aims to explore the potential of statutory GAAR in handling tax avoidance practices in Indonesia and SAAR formulas that are suitable for the Indonesian context. This qualitative research employed a case study approach. Results show that the application of SAAR and the principle of substance over form in Indonesia cannot yet be applied properly; thus GAAR is needed. It is expected that the implementation of statutory GAAR can accommodate the limitations of regulators in light of unknown and future tax avoidance schemes.. Keywords: Tax-avoidance, tax planning, specific anti avoidance rule (SAAR), international tax

Tax Avoidance and Tax Evasion: The Indian Case

1987 ◽  
Vol 21 (2) ◽  
pp. 233-255 ◽  
Author(s):  
Anil Kumar Jain
Keyword(s):  
Tax Evasion ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Business Relationships ◽  
Black Economy ◽  
Legal Provisions ◽  
Tax Laws ◽  
Conversational Language

‘Tax avoidance’ and ‘tax evasion’ are terms so frequently referred to in economic and business relationships today that they constitute part of our conversational language and people in general use these terms even without knowing their exact meaning and difference. Whereas tax avoidance implies a situation in which the taxpayer reduces his tax liability by taking advantage of the loop-holes and ambiguities in the legal provisions, in the case of tax evasion, facts are deliberately misinterpreted and the tax liability is understated. Thus, while tax avoidance is perfectly legal and is, at times, referred to as ‘tax planning’, tax evasion is illegal and, therefore, carries with it the risk of penalties and prosecutions under the tax laws. As such, the black economy comprises the sum total of all the various methods of tax evasion but does not include tax avoidance. Accordingly, whereas the consequences of the two phenomena are different for the taxpayers, both reduce the revenue of the Exchequer and consequently need to be checked to the greatest extent possible.

scholarly journals ANALISIS PERUMUSAN KEBIJAKAN MANDATORY DISCLOSURE RULES SEBAGAI ALTERNATIF DALAM MENGATASI PRAKTIK PENGHINDARAN PAJAK DI INDONESIA

2017 ◽  
Vol 1 (1) ◽  
pp. 65-75
Author(s):  
Susi Zulvina
Keyword(s):  
Economic Development ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Mandatory Disclosure ◽  
Information Transparency ◽  
Association Member ◽  
The World ◽  
Disclosure Rules ◽  
International Tax ◽  
Taxation System

ABSTRACT Tax avoidance is one of the most serious problems faced by countries in the world, especially for countries that make taxes as their main revenues. Tax avoidance practices will reduce the source of revenues in the country and become a potential for unhealthy competition between countries. OECD and G-20 countries have a plan to overcome tax avoidance in the whole world and to improve international tax regulations, one of which is that information transparency related to aggressive tax planning by Mandatory Disclosure Rules (MDR) policy. Indonesia is the association member but has not implemented that policy. As an OECD recommendation, the MDR policy form should be researched in order to be applicable in the taxation system in Indonesia. ABSTRAK Penghindaran pajak merupakan salah satu permasalahan serius yang dihadapi oleh negara- negara di dunia ini, khususnya bagi negara yang menjadikan pajak sebagai sumber utama pendapatan negara. Praktik penghindaran pajak akan mengurangi sumber penerimaan negara dalam negeri dan menjadi potensi persaingan yang tidak sehat antar negara. Organisation for Economic Development(OECD) bekerja sama dengan negara anggota G-20 berusaha mengatasi praktik penghindaran pajak di dunia dan ingin memperbaiki regulasi perpajakan internasional, salah satunya dengan cara tranparansi informasi terkait perencanaan pajak yang bersifat agresif dalam bentuk kebijakan Mandatory Disclosure Rules (MDR). Indonesia sebagai salah negara anggota sampai saat ini belum menerapkan kebijakan tersebut. Sebagai rekomendasi OECD, bentuk kebijakan MDR tersebut perlu diteliti agar dapat diterapkan dalam sistem perpajakan di Indonesia.

scholarly journals Sustainable Tax Behavior of MNEs: Effect of International Tax Law Reform

2020 ◽  
Vol 12 (18) ◽  
pp. 7738
Author(s):  
Hyejin Cho
Keyword(s):  
Private Information ◽  
Multinational Enterprises ◽  
Action Plan ◽  
Tax Avoidance ◽  
Sustainable Growth ◽  
Law Reform ◽  
Tax Law ◽  
Intangible Asset ◽  
Public Attention ◽  
International Tax

As tax is related to the sustainable growth of societies around the world, international tax avoidance by multinational enterprises (MNEs) has gained public attention. The Organization for Economic Co-operation and Development (OECD) introduced the Base Erosion and Profit Shifting (BEPS) Action Plan to promote sustainable tax behavior of MNEs. To guide policymakers and regulators in curving MNEs’ tax schemes utilizing market imperfection, this paper empirically assesses whether the international law reform regarding information disclosures on global operation achieves the intended result of lowering MNEs’ tax avoidance. In addition, the conditional effect of family ownership and intangible asset intensity is addressed to find the factors that strengthen the tax avoidance level of MNEs. This study employs propensity score matching and difference-in-differences method to analyze the changes in international tax liabilities of Korean MNEs in response to BEPS Action Plan 13. The empirical results show that the sustainable tax behavior of MNEs increased when international tax law demanded that they reveal critical information on global allocation of income, economic activity, and taxes paid among countries. Furthermore, the results show that there was a higher increase in the international tax liabilities of MNEs with higher intangible asset intensity. The results suggest to policymakers that the private information disclosure of MNEs’ global operation and sharing such information is essential in tackling MNEs’ BEPS activities, and intangible assets are indeed an important source of tax avoidance.

scholarly journals Combating Fiscal Fraud and Empowering Regulators

2021 ◽  
Keyword(s):  
Money Laundering ◽  
Tax Evasion ◽  
Business Models ◽  
Rapid Change ◽  
Tax Avoidance ◽  
Profit Shifting ◽  
Tax System ◽  
New Business ◽  
International Tax ◽  
The Impact

This book showcases a multidisciplinary set of work on the impact of regulatory innovation on the scale and nature of tax evasion, tax avoidance, and money laundering. We consider the international tax environment an ecosystem undergoing a period of rapid change as shocks such as the financial crisis, new business forms, scandals and novel regulatory instruments impact upon it. This ecosystem evolves as jurisdictions, taxpayers, and experts react. Our analysis focuses mainly on Europe and five new regulations: Automatic Exchange of Information, which requires that accounts held by foreigners are reported to authorities in the account holder’s country of residence; the OECD’s Base Erosion and Profit Shifting initiative and Country by Country Reporting, which attempt to reduce the opportunity spaces in which corporations can limit tax payments and utilize low or no tax jurisdictions; the Legal Entity Identifier which provides a 20-digit identification code for all individual, corporate or government entities conducting financial transactions; and the Fourth and Fifth Anti-Money Laundering Directives, that criminalize tax crimes and prescribe that the Ultimate Beneficial Owner of a company is registered. Working from accounting, economic, political science, and legal perspectives, the analysis in this book provides an assessment of the reforms and policy recommendations that will reinforce the international tax system. The collection also flags the dangers posed by emerging tax loopholes provided by new business models and in the form of freeports and golden passports. Our central message is that inequality can and has to be reduced substantially, and we can achieve this through an improved international tax system.

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