Demand for tax instruments encouraging capital investment by Russian organizations

2020 ◽  
Vol 26 (8) ◽  
pp. 1846-1869
Author(s):  
N.V. Pokrovskaya ◽  
A.A. Razuvaeva
Keyword(s):  
Income Tax ◽  
Capital Investment ◽  
Significant Proportion ◽  
Tax Incentives ◽  
Tax Base ◽  
Investment Activity ◽  
Fixed Assets ◽  
Accelerated Depreciation ◽  
Bonus Depreciation ◽  
Effectiveness Assessment

Subject. The article addresses tax incentives for capital investment in the framework of corporate income tax, and their effectiveness, estimated as the scale of application of incentive instruments. Objectives. We explore tax instruments intended to boost the investment activity of businesses in Russia, in the context of their demand by Russian organizations. Methods. To estimate the efficiency of tax incentives for boosting investment, we calculate absolute and relative values of reduction in the tax base, according to the data of the Ministry of Finance of the Russian Federation, the Federal Tax Service of Russia, and Rosstat, and the number of companies, using these tax instruments. Results. The set of tax incentives and preferences focused on stimulating the investment activity within the income tax is quite wide, however, their application imposes significant restrictions on taxpayers. The effectiveness of applied tax incentives remains rather low. A relatively modest number of organizations use early depreciation mechanisms for acquired fixed assets to reduce income tax. Bonus depreciation is more common, however, it is applied by a sufficiently low number of taxpayers, although to a significant proportion of newly entered items of property, plant and equipment. Accelerated depreciation, both the declining method of depreciation and increasing coefficients, are used less frequently than bonus depreciation. Conclusions. Prospects for expanding the investment activity of a business can be associated with investment tax deduction. Its effectiveness assessment is possible only in the medium term.

The Effect of State Income Tax Apportionment and Tax Incentives on New Capital Expenditures

2003 ◽  
Vol 25 (s-1) ◽  
pp. 1-25 ◽  
Author(s):  
Sanjay Gupta ◽  
Mary Ann Hofmann
Keyword(s):  
Income Tax ◽  
Fixed Effects ◽  
Capital Investment ◽  
Manufacturing Sector ◽  
Tax Incentives ◽  
Corporate Income Tax ◽  
Capital Expenditures ◽  
Tax Burden ◽  
Tax Regimes ◽  
Statutory Tax Rate

This study examines how variations in states' corporate income tax regimes affect new capital investment by business. Using U.S. state-aggregated data from 1983 to 1996, we find in pooled and fixed-effects regressions that new capital expenditures by corporations in the manufacturing sector are decreasing in the income tax burden on property (measured as the product of the statutory tax rate and the property factor weight), and increasing at a decreasing rate in investment-related tax incentives. The effect of the income tax burden on property is more pronounced for states mandating unitary taxation or the throwback rule. Triangulating our empirical findings with prior analytical and simulation studies suggests the following hierarchy for the relative importance of major attributes of state corporate income tax regimes: the unitary or throwback requirement is most influential on incremental capital investment, followed by apportionment weights and tax rates, and, finally, investment-related incentives.

scholarly journals Taxation of innovation activities in the agricultural sector under the laws of Ukraine

2020 ◽  
Vol 11 (4) ◽  
Author(s):  
Pakholiuk Anatolii ◽  
Keyword(s):  
Agricultural Sector ◽  
Tax Incentives ◽  
Innovative Activity ◽  
Agricultural Producers ◽  
Innovation Activities ◽  
Fixed Assets ◽  
Accelerated Depreciation ◽  
Tax Benefits ◽  
Tax Holidays ◽  
Stimulation Of

The article is devoted to the analysis of legal bases of taxation of innovative activity in the agrarian sphere. The peculiarities of the application of the main measures of tax stimulation of innovative activity in the agricultural sphere, such as «tax holidays», accelerated depreciation of fixed assets, special tax regime, exemption from import duties are highlighted. It is concluded that the tax incentives applied to agricultural producers mainly have an indirect impact on the development of innovation in the agricultural sector. Tax benefits that directly relate to the development of innovation in agriculture, in most cases provided for in special sectoral legislation (agricultural, economic), which excludes the possibility of their application in practice until the relevant amendments to the Tax Code of Ukraine. The necessity of making changes to the legislation in order to optimize the taxation of agrarian business and development of innovations in the agrarian sphere of the economy of Ukraine is substantiated. Keywords: agricultural sphere, innovations in agriculture, taxation, tax incentives, tax holidays, special tax regime

scholarly journals RENEWAL OF FIXED ASSETS IN UKRAINE: PROBLEMS OF THEIR DEPRECIATION AND USE

2018 ◽  
Vol 2018 (8) ◽  
pp. 62-74
Author(s):  
Larysa LAZEBNYK ◽  
Keyword(s):  
Morphological Analysis ◽  
Scientific Literature ◽  
Legal Concept ◽  
Tax Base ◽  
Investment Activity ◽  
Theoretical Concepts ◽  
Normative Documents ◽  
Historical Reason ◽  
Fixed Assets ◽  
Economic Depreciation

The generalization of statistics for our state and its comparison with similar indicators of other countries gave grounds for the conclusion about underinvestment of Ukrainian economy. Strengthening investment activity depends on such a tool of the state economic policy as depreciation charges, which through imperative mechanisms of renovation is capable of providing renewal of fixed assets. The research is based on a structural and morphological analysis of analytical and statistical information on depreciation of fixed assets. Two fundamentally different theoretical concepts of the fixed assets depreciation are considered: economic and financial ones. It is indicated that in Ukraine in the accounting and tax normative documents the legal concept of economic depreciation is fixed, which is not based on the needs of reproduction. It is proved that in scientific literature the issues of amortization appointment are considered mainly from the point of focus on the revitalization of investment processes, that is, from the standpoint of the financial concept of depreciation. Historical reason for such a contradiction is revealed: formation of depreciation fund and a special account in a bank during the years of the USSR in the accounting. This gave grounds for considering the resources of the depreciation fund and, accordingly, depreciation deductions as funds that could be used for the technical re-equipment of enterprises. The thesis is based that the restoration of a depreciation fund, similar to the Soviet one, means the withdrawal of a part of the monetary resources from enterprises’ cash and short money instruments. This cannot positively affect the economy of enterprises in a corrupt country. The possibility of introducing a financial concept of depreciation to maximize the use of the depreciation resource for the needs of renewal of fixed assets is considered. A conclusion is made about the need for prior normative-legal support. It is suggested to: (i) find an opportunity to reflect information on unused amounts of depreciation charges in accounting records; (ii) increase the income tax base by including the depreciation amounts that were not used as investments.

scholarly journals Assessment of efficiency of corporate accounting policy from the perspective of optimization of income tax

2020 ◽  
pp. 9-17
Author(s):  
Yuliya Vladimirovna Malakhova ◽  
Aleksei Evgenevich Malakhov ◽  
Irina Vladimirovna Sazonova
Keyword(s):  
Income Tax ◽  
Practical Importance ◽  
Economic Benefits ◽  
Tax Planning ◽  
Abstract Concepts ◽  
Tax Base ◽  
Analysis And Synthesis ◽  
Accelerated Depreciation ◽  
High Level ◽  
Accounting Policy

Accounting policy is one of the key instruments for optimizing taxation of a business. At the same time, many companies do not use this strategy to reduce their tax costs due to absence of tax planning, and thus, likelihood of receiving economic benefits from the changes in accounting policy. The subject of this research is the changes in corporate accounting policy, aimed at optimizing income tax. The author suggests methods of forecasting economic impact from implementation of accelerated depreciation. The work employs general scientific methods and approaches. Method of scientific abstraction allowed formulating abstract concepts, while methods of analysis and synthesis allowed studying separate elements of socioeconomic phenomena with subsequent combination of these elements into one whole. The scientific novelty of this study consists in the proposed methodology for optimizing tax base by income tax through changes in accounting policy within the framework of creating reserves, redistribution of costs, classification of expenses, etc. The conclusions carry practical importance and allow high level of precision in substantiation of management decisions pertaining to tax planning and optimization of taxation.

scholarly journals Short of Euphoria

1987 ◽  
Vol 1 (1) ◽  
pp. 59-71 ◽  
Author(s):  
Richard A Musgrave
Keyword(s):  
Income Tax ◽  
Essential Feature ◽  
Basic Structure ◽  
Tax Base ◽  
Corporation Tax ◽  
Investment Tax Credit ◽  
Accelerated Depreciation ◽  
War Finance ◽  
Base Broadening ◽  
Current Reform

The Tax Reform Act of 1986 is the most sweeping reform since the early 1940s when the pressures of war finance forced the transformation of the income tax into a mass tax, and made it the core of the federal tax system. Since then many adjustments have been made, but the basic structure of the tax has remained unchanged. Behind this nominal stability, however, a slow erosion of the tax base appears to have been at work. The widening of loopholes and emergence of high-income shelters gained momentum in recent years and undermined the public's faith in the income tax. The compounding of the investment tax credit and accelerated depreciation diluted and distorted the base of the corporation tax. The current reform reverses these trends, a major accomplishment that all reformers will welcome. But the reform is far from complete. Its base broadening goes only part of the way, and though substantial gains have been made, they have not come without a price. The pattern of rate reduction, involving a drastic flattening of bracket rates, signals retreat from the progressive taxation that was an essential feature of the income tax tradition. Further, focus on reform has diverted attention from meeting urgent revenue needs.

The investment activity of Russian business: Relationships with corporate income tax burden

2020 ◽  
Vol 23 (7) ◽  
pp. 800-823
Author(s):  
A.A. Razuvaeva ◽  
N.V. Pokrovskaya
Keyword(s):  
Income Tax ◽  
Systems Approach ◽  
Corporate Income Tax ◽  
Federal State ◽  
Tax Burden ◽  
Return On Assets ◽  
Investment Activity ◽  
Analysis And Synthesis ◽  
Tax Benefits

Subject. This article assesses the role of tax incentives for the Russian business' investment behavior. Objectives. The article aims to identify the relationship between the corporate income tax burden as an indicator responding to tax benefits application and the investment activities of Russian companies. Methods. For the study, we used the methods of analysis and synthesis, and the systems approach. The analysis covers the period from 2012 to 2018. The data of the Russian Federal State Statistics Service, Federal Tax Service of Russia, and the Ministry of Finance of the Russian Federation are the source of information for analysis. Results. The article summarizes the characteristics of the investment activity of the Russian business. However, the article does not reveal any obvious relationship between the income tax burden and the investment activity of the Russian business in the 2010s. There is also no link found between fixed investment and return on assets. Conclusions. The increase in income tax burden in the late 2010s, accompanied by a decrease in profitability, poses a threat to the active investment development of Russian organizations.

Tax incentives of China’s investments in Zabaykalsky Krai: implementation of behavioral economic models

2020 ◽  
pp. 69-84
Author(s):  
Evgeniya Mikhailovna Popova ◽  
Irina Vitalevna Mezentseva
Keyword(s):  
Behavioral Economics ◽  
Tax Incentives ◽  
Human Mind ◽  
Investment Climate ◽  
Investment Activity ◽  
Investment Projects ◽  
Tax Incentive ◽  
Regional Budget ◽  
Subjective Aspect ◽  
Investment Process

Currently, the Russian regions apply a vast array of tools for regulating the investment process, including tax incentives. Active use of tax preferences is dictated by the fact that in the conditions of regional budget deficit, tax incentives, unlike subsidies, do not require direct budget expenditures for stimulating investment activity. However, the world experience demonstrates that tax incentives do not fall under the group of factors that strongly affect investment decisions. For determining the degree of preference of tax incentives in relation to other measures of regional support, a survey was carried among Chinese investors, who implement investment projects on the territory of Zabaykalsky Krai. The survey was based on a method of hierarchical analysis based on the special matrices by filed in by the investors. The acquired results displayed that out of ten measures of state support, tax incentives hold the eighth place. The calculated coefficient of the significance of tax incentives testifies to the low attractiveness of fiscal stimuli for the Chinese investors. The authora attempted to find the reasons for tax incentive not being in demand. The scientific novelty of this work consists in conducting the analysis of regional legislation that regulates the order of granting investment tax incentives based on the concept of behavioral economics. In the course of application of the provisions of behavioral economics, emphasis was made on the subjective aspect of the mechanism of preferential taxation. The reasonableness of considering such peculiarities of human mind as cognitive inertia and relativity is substantiated with regards to arranging the structure of tax incentives that would allow increasing the importance of tax incentives in formation of investment climate on the territory of Zabaykalsky Krai. The authors make recommendations on increasing the attractiveness of tax incentives among Chinese investors based on the concept of reference point and the effect of loss aversion.

scholarly journals Digitalization as a Strategic Means of Achieving Sustainable Efficiencies in Construction Management: A Critical Review

2021 ◽  
Vol 13 (9) ◽  
pp. 5040
Author(s):  
Bahareh Nikmehr ◽  
M. Reza Hosseini ◽  
Igor Martek ◽  
Edmundas Kazimieras Zavadskas ◽  
Jurgita Antucheviciene
Keyword(s):  
Capital Investment ◽  
Significant Proportion ◽  
Complex Activity ◽  
Firm Level ◽  
Construction Firms ◽  
Business Results ◽  
Management Protocol ◽  
Construction Firm ◽  
Construction Activity ◽  
Multiple Skills

Construction is a complex activity, characterized by high levels of capital investment, relatively long delivery durations, multitudinous risks and uncertainties, as well as requiring the integration of multiple skills delivering a huge volume of tasks and processes. All of these must be coordinated carefully if time, cost, and quality constraints are to be met. At the same time, construction is renowned for performing poorly regarding sustainability metrics. Construction activity generates high volumes of waste, requires vast amounts of resources and materials, while consuming a significant proportion of total energy generated. Digitalization of the construction workplace and construction activities has the potential of improving construction performance both in terms of business results as well as sustainability outcomes. This is because, to put it simply, reduced energy usage, for example, impacts economic and “green” performance, simultaneously. Firms tinkering with digitalization, however, do not always achieve the hoped-for outcomes. The challenge faced is that a digital transition of construction firms must be carried out at a strategic level—requiring a comprehensive change management protocol. What then does a digital strategy entail? This study puts forward an argument for the combined economic and sustainability dividends to be had from digitizing construction firm activities. It outlines the requirements for achieving digitalization. The elements of a comprehensive digitalization strategy are cataloged, while the various approaches to developing a digitalization strategy are discussed. This study offers practitioners a useful framework by which to consider their own firm-level efforts at digitalization transition.

Sign in / Sign up

Export Citation Format

Share Document