scholarly journals Tax Avoidance and Value-Added vs. Income Taxation in an Open Economy

10.3386/w5527 ◽  
1996 ◽  
Author(s):  
Roger Gordon ◽  
Soren Bo Nielsen
Keyword(s):  
Open Economy ◽  
Tax Avoidance ◽  
Value Added ◽  
Income Taxation

scholarly journals Assessing Profit Shifting in Lithuanian Firms

2021 ◽  
Vol 92 ◽  
pp. 02037
Author(s):  
Egidijus Kundelis ◽  
Renata Legenzova ◽  
Julijonas Kartanas
Keyword(s):  
Open Economy ◽  
Fixed Effects ◽  
Multinational Enterprises ◽  
Tax Avoidance ◽  
Value Added ◽  
Tax Rates ◽  
Profit Shifting ◽  
Tax Rate ◽  
Small Economies ◽  
Statutory Tax Rate

Research background: Multinational enterprises (MNEs) employ tax avoidance by ability to use differences in tax systems of various countries to successfully incur effective tax rate that is lower than the statutory one. Literature analysis revealed that previous research rarely concentrated on profit shifting practices in small economies. It mostly covered large countries (USA, Germany) or regions (e.g. Europe). Research on Lithuania, as a small open economy characterized by lower corporate income tax rates, is a relevant case for the analysis. Purpose of the article: The purpose of the article is to assess profit shifting via transfer mispricing in Lithuanian companies. Methods: Regression analysis with fixed effects was applied to a sample of 3,563 Lithuanian companies for the period of 2010–2018. The data was retrieved from Amadeus database. Findings & Value added: The results of testing profit shifting channel – transfer mispricing – showed that tax incentives significantly affect earnings of MNEs in the sample while results of domestic firms are puzzling. Earnings of multinationals in the sample are strongly affected by statutory tax rate difference between the subsidiary operating in Lithuania and the parent company in a foreign country. Such results may imply that in small economies like Lithuania (characterized by lower tax rates and lower tax avoidance costs) profit shifting via transfer mispricing is used by MNEs as a channel of corporate tax avoidance.

scholarly journals Automation and Optimal Capital Income Taxation

2020 ◽  
Author(s):  
Yuuki Maruyama
Keyword(s):  
Open Economy ◽  
Income Tax ◽  
Value Added ◽  
Income Taxation ◽  
Marginal Productivity ◽  
Labor Costs ◽  
Capital Income ◽  
Value Added Tax ◽  
Real Wages ◽  
Capital Income Taxation

This model shows that capital income taxation does not affect real wages. Judd's theorem (1985) that a zero capital income tax rate is optimal for workers is based on the assumption that all capital has the effect of increasing the marginal productivity of labor. However, in reality, some capital lowers the marginal productivity of labor through automation (technological unemployment). Therefore, this model assumes two types of capital. Labor-complementing capital increases the marginal productivity of labor (real wages), while labor-substituting capital decreases it. The rates of return are kept equal between the two. Using such an economic growth model, we analyze the long-run effects of taxes on real wages. Even if capital income tax is imposed, real wages don’t change because both labor-complementing capital and labor-substituting capital decrease. In contrast, value-added tax results in reduced real wages. This is because labor costs are deducted in capital income tax, but not in value-added tax. Capital income tax is more suitable for income redistribution than value-added tax. These conclusions also apply to an open economy.

scholarly journals Demand and Defective Growth Patterns: The Role of The Tradable and Non-Tradable Sectors in an Open Economy

2014 ◽  
Vol 104 (5) ◽  
pp. 272-277 ◽  
Author(s):  
Sandile Hlatshwayo ◽  
Michael Spence
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Value Added ◽  
Growth Patterns ◽  
Structural Elements ◽  
Total Income ◽  
Us Economy ◽  
The Us ◽  
Tradable Sector

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.

scholarly journals Macroeconomic policy regime in Poland

Equilibrium ◽  
2016 ◽  
Vol 11 (3) ◽  
pp. 411
Author(s):  
Milka Kazandziska Kazandziska
Keyword(s):  
Monetary Policy ◽  
Economic Policy ◽  
Industrial Policy ◽  
Open Economy ◽  
Aggregate Demand ◽  
Financial System ◽  
Value Added ◽  
Macroeconomic Policy ◽  
Wage Policy ◽  
Foreign Economic Policy

The goal of this paper is to analyse the economic development of Poland using the concept of macroeconomic policy regimes (MPRs). Six elements of a MPR will be identified: foreign economic policy, industrial policy, the financial system, wage policy, monetary policy and fiscal policy. Examining the functionality of the development of these elements applied to Poland is a further aim of this paper. The functionality of the development of the MPR elements will be analysed on the basis of the fulfilment of the objectives, as well as the use of the proposed instruments and strategy assigned to every element of MPR. Due to space limits, we are going to focus on the former in this paper. Taking into consideration that Poland is an emerging and a relatively open economy, foreign economic policy and industrial policy play very significant roles in restructuring of the economy towards production and exports of high value-added products, which would enable the country to follow a growth path consistent with an external balance. The financial needs of the manufacturing sector and particularly of the producers and/or exporters of high-end products need to be satisfied by the financial system, whose stability needs to be secured with the help of monetary policy. The latter is, moreover, in charge of providing low-cost finance and maintaining the stability of the exchange rate. Stabilising the inflation rate would be given to wage policy. Fiscal policy’s main tasks would be to correct aggregate demand shocks and reduce income inequality.

scholarly journals Income Taxation Rules and Stability of a Small Open Economy

2020 ◽  
Vol 65 ◽  
pp. 103236
Author(s):  
Been-Lon Chen ◽  
Yunfang Hu ◽  
Kazuo Mino
Keyword(s):  
Open Economy ◽  
Small Open Economy ◽  
Income Taxation

Gender, Industrialization, and Industrial Hubs

2020 ◽  
pp. 400-424
Author(s):  
Fiona Tregenna ◽  
Özge İzdeş
Keyword(s):  
Women Workers ◽  
Working Conditions ◽  
Open Economy ◽  
Industrial Development ◽  
Value Added ◽  
Female Employment ◽  
Extensive Literature ◽  
Labour Standards ◽  
Gendered Patterns ◽  
Experiences Of Women

Industrial hubs are a key component of open-economy industrialization and have the potential to influence gendered patterns in industrial development as well as contributing to structural transformation. In most countries, the majority of the workforce in hubs is female—employment is highly feminized. An extensive literature documents the experiences of women workers in hubs, drawing attention to low wages and poor working conditions in export processing zones (EPZs) in particular. This chapter considers the effects of hubs on women and on gender equality. We propose a conceptual framework for analysing these effects, both direct/static and indirect/dynamic, through the channels of employment, wages, working conditions, rights and benefits, empowerment, and social effects. The negative experiences of women workers in many hubs derive in part from the typical concentration of women’s employment in low-wage, low-skill, low value-added hubs, rather than in forward-looking hubs that build on dynamic comparative advantage with decent labour standards.

scholarly journals PENGARUH ECONOMIC SHOCK TERHADAP PENERIMAAN PAJAK PADA KANTOR WILAYAH PAJAK DI INDONESIA

2009 ◽  
Vol 10 (1) ◽  
pp. 68
Author(s):  
Eddi Wahyudi ◽  
Bunasor Sanim ◽  
Hermanto Siregar ◽  
Nunung Nuryartono
Keyword(s):  
Open Economy ◽  
Time Series Data ◽  
Panel Data Analysis ◽  
Research Result ◽  
Small Open Economy ◽  
Warning System ◽  
Value Added ◽  
Series Data ◽  
Directorate General ◽  
Economic Shock

The purpose of this research is to analyse how far the economic shock influence upon the tax revenue performance in the regional tax office. The research is conducted using yearly time series data within 2002 to 2007 and also applying two indicators: Income Tax and Value Added Tax. By using the panel data analysis the result upon 31 Kanwil Directorate General of Tax (DGT) whole Indonesia it is known that the fluctuation variable of Tax Early Warning System (TEWS) gives positive effect to the tax income performance at Kanwil Khusus, Kanwil WP Besar 1 and 2, Kanwil Jakarta Selatan and Kanwil Jakarta Pusat. Overall the entire research result explains that Indonesia economic condition until he year of 2007 is still in the small open economy status and identically to New Keynes theory. The conclusion is as if the research about the Indonesia business cycle previously and consistent with the initial assumption applied.

scholarly journals Problems of Detection and Investigation of Tax Crimes in the Timber Industry of the Irkutsk Region

2021 ◽  
Vol 12 (4) ◽  
Author(s):  
Anastasija Kolukanova ◽  
Vadim Kulakov ◽  
Dmitrij Nikerov
Keyword(s):  
Law Enforcement ◽  
Tax Avoidance ◽  
Value Added ◽  
Joint Control ◽  
Timber Industry ◽  
Factors Affecting ◽  
Information Interaction ◽  
Time Period ◽  
Irkutsk Region ◽  
The Russian Federation

The article considers the activity of the enterprises of the timber industry of the region. The volume of timber exports, tax burden, tax revenues to the budget of the Irkutsk region and to the consolidated budget of the Russian Federation, registered tax crimes, amounts of material damage caused are analyzed. The applicable tax avoidance schemes are presented, as well as schemes aimed at illegal reimbursement of value added tax from the budget. Problematic issues are highlighted in terms of information interaction between law enforcement and tax authorities in order to identify tax crimes, as well as in conducting joint control and verification activities, and ways are proposed to solve these problems. The peculiarities of conducting the main investigative actions necessary for successful solving of tax crimes in the timber industry are considered. The issue of factors affecting the time period from the identification of a tax crime to the conviction is raised, as well as the disproportions of the penalties applied to the committed acts. Emphasis is placed on the need for legal and regulatory improvements, as well as the use of proposed measures in modern investigative practice.

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