Incentives for Renewable Energies in Colombia

This work analyses the potential effects of the incentives for renewable energies approved in Colombia by two main acts. A methodology involving adjustments for tax reductions and accelerated depreciation is used to evaluate the Levelized Cost of Electricity (LCOE) for the four main clean energy resources available in Colombia. The results show important reductions in the LCOE specially, under the act approved in the development plan of the new government, where the LCOE of three technologies is below the grid parity.

Assessment of the international competitiveness of the corporate profit tax in Ukraine

The article is devoted to assessing the international competitiveness of the corporate profit tax system based on the approach of the US Tax Foundation, which develops International Tax Competitiveness Index of the corporate profit tax (ICI) and takes into account the level of profit tax rates, cost recovery, tax incentives and complexity of tax law. According to the analysis of the international ranking of OECD countries, Estonia, Latvia, Lithuania, and Hungary had the highest ICIs in 2019-2020. The main factors that have had a positive effect on their competitiveness are the low top marginal income tax rate, unlimited loss carryback and carryforward, no restrictions on the list of assets subject to depreciation, as well as the use of accelerated depreciation, which allows companies to compensate for a larger share of the initial value of assets, LIFO inventory or at least inventory by the weighted average cost method, no Patent Box; no tax credit for R&D, and low corporate profit tax complexity. The calculation of the ICI for Ukraine, based on the approbation of the methodological approach of the Tax Foundation, found that in 2019-2020 Ukraine with a total score of 55.07 took 24th place out of 35 OECD countries. The author characterizes the main components of Ukrainian corporate profit taxation in terms of their impact on international competitiveness; in addition, ways to increase ICI are substantiated.

Assessment of the international competitiveness of the corporate income tax of Ukraine

The article is devoted to assessing the international competitiveness of the corporate income tax system based on the approach of the US Tax Foundation, which develops International Tax Competitiveness Index of the corporate income tax (ICI) and takes into account the level of income tax rates, cost recovery, tax incentives and complexity of tax law. According to the analysis of the international ranking of OECD countries, Estonia, Latvia, Lithuania, and Hungary had the highest ICIs in 2019-2020. The main factors that have had a positive effect on their competitiveness are the low top marginal income tax rate, unlimited loss carryback and carryforward, no restrictions on the list of assets subject to depreciation, as well as the use of accelerated depreciation, which allows companies to compensate for a larger share of the initial value of assets, LIFO inventory or at least inventory by the weighted average cost method, no Patent Box; no tax credit for R&D, and low corporate income tax complexity. The calculation of the ICI for Ukraine, based on the approbation of the methodological approach of the Tax Foundation, found that in 2019-2020 Ukraine with a total score of 55.07 took 24th place out of 35 OECD countries. The author characterizes the main components of Ukrainian corporate income taxation in terms of their impact on international competitiveness; in addition, ways to increase ICI are substantiated.

CURRENT STATE OF CORPORATE INCOME TAXATION SYSTEM IN UKRAINE

Taxes are used as a way of government influence on social production, its dynamics and structure, and are also a source of government revenue. To the greatest extent, this applies to corporate income tax, since it is one of the most important sources of budget revenue. Difficult political and economic conditions, instability and complexity of domestic legislation, a significant tax burden on business highlight the need to study the peculiarities of corporate income taxation not only as a powerful fiscal tool, but also in terms of its regulatory functions. In Ukraine, the possibilities of using corporate income tax as a regulatory factor are somewhat limited by its large budgetary value, so there is a need to study also a foreign experience of corporate income taxation in order to find the best ways for our country to improve the collection and administration of corporate income tax. To stimulate entrepreneurial activity, ensuring its stable development, it is necessary to create an optimal effective tax system that would provide stable revenues to the state budget, without burdening entrepreneurs. This issue is extremely acute, because the corporate income tax can be used as an effective tool for balanced dynamic economic growth on the basis of innovative development, and as a reliable source of state budget revenues. This article defines theoretical questions concerning the economic essence and place of the corporate profit tax in the taxation system. Determined main reasons for the fluctuations of revenues from corporate income tax in the budget of Ukraine, namely: the loss of income tax of the dominant fiscal role in the formation of tax revenues of Ukraine is due to lower rates and changes in the procedure for determining the object of taxation, as well as general negative trends in economic development of Ukraine. The main areas of improvement of corporate income taxation mechanism in Ukraine at the present stage of economy development are investigated. Conclusions are drawn about introducing a progressive system of corporate income taxation, harmonization of accounting and tax legislation on the calculation of corporate income tax, reviewing the list of tax incentives and using the accelerated depreciation method that reduces the tax base.

The Effect of Tax Incentives Practices on Sustainability of Micro, Small and Medium Enterprises in Ethiopia During the Outbreak of Corona Virus Pandemic

Purpose: The aim of this study was to identify the effect of tax incentive practise on sustainability of MSMEs during outbreak of corona virus pandemic in Ethiopia. Design/methodology/approach: In order to achieve this objective, the researchers have employed quantitative research approach with explanatory research design in which six hypotheses have been tested. The primary data was collected from 300 respondents using structured questionnaires. Multiple regression model was employed to identify the effect of tax incentives on sustainability of MSMEs in Ethiopia. Findings: According to the regression analysis, this study revealed that tax holiday, tax allowance, reduction in tax rate, accelerated depreciation, loss carry forward and tax exemption have positive and statistically significant effect on the sustainability of the MSMEs. Based on the finding of the study was concluded that the existence of tax incentive practice has positive contribution to sustainability of the micro, small and medium sized enterprise.Research limitations/implications: The current study was geographically focus on Ethiopia by considering the micro, small and medium sized enterprises sector. The subject wise was focused on the effect of the tax incentives:(tax holiday, tax allowance, tax exemption, and accelerated depreciation, reduction in tax rate, and loss carry forward) and on the sustainability of MSMEs. The study used primary data which is limited to a year of 2020. It might be improved in the future if other researchers incorporate large firms in the country and uses secondary data for analysis. Practical implications: To survive, micro, small and medium scale enterprises need the support from the government in the form of tax incentives. The role of tax incentives in enhancing the growth of micro, small and medium sized enterprises is very significant on the sustainability of MSMEs as well as the economy as a whole. Hence, the findings and recommendations of the current study might serve as an ingredient and be informative to the policy makers on MSMEs sector. It might also give a general insight to the policy makers, academician and professional groups of society and the public at large with regard to the role of effect of tax incentives on the sustainability and growth of MSMEs during outbreak of coronavirus.Originality/value: This study contributes to empirical evidence about the effect of tax incentives practices on sustainability of micro, small and medium enterprises in Ethiopia by considering tax incentive practice in terms of tax holiday, tax allowance, reduction in tax rate, accelerated depreciation, loss carry forward and tax exemption. As tax incentives theories supported the findings of this study, we have concluded that tax incentive practices provided by government have positive contribution for the sustainability and growth of micro, small and medium sized enterprises in Ethiopia

Accelerated Depreciation Tax Credit and Corporate Financialization Based on the PSM-DID Model

In this paper, we use the data of China’s manufacturing listed companies from 2009 to 2018, adopt the method of propensity score matching and double difference (PSM-DID) to solve the sample’s selective bias, and select the accelerated depreciation policy of fixed assets issued by China in 2014 as a quasi-natural experiment to verify the robustness of the empirical results, which will affect the R&D investment of manufacturing enterprises and the structural tax reduction of China. This paper makes an empirical study on the effect of fixed asset investment to restrain the financialization of manufacturing enterprises. The results show that (1) accelerated depreciation policy of fixed assets significantly promotes the R&D investment and fixed asset investment of enterprises and reduces the level of enterprise financialization; (2) accelerated depreciation of fixed asset local tax policy, through guiding the R&D investment, fixed asset investment, and deferred income tax acquisition of enterprises. It guides the investment of enterprises to the real economic field, thus reducing the financial assets of enterprises. The investment has restrained the financial trend of real enterprises. The conclusion of this paper is of practical significance to support the formulation and implementation of the national structural tax reduction policy and to clarify the regulatory role and mechanism of the structural tax reduction policy.

Tax incentives as an element of the state's economic policy

The article considers the necessity and relevance of tax incentives, and its types: "tax holidays", "tax haven", "tax havens", "investment credit", "accelerated depreciation", "tax deferral". The goals of economic tax incentives are systematized. The classification of tax benefits is generalized. Conclusions are drawn about the need to assess the effectiveness of tax incentives.

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

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

Analytical Generalization of the Depreciation Multiplier as a Factor of Extended Reproduction of Fixed Assets Depending on the Age Structure

The subject of the study is the expansion multiplier as a quantitative characteristic of the depreciation expansive effect in models of the extended reproduction of fixed assets. The aim of the study is to identify the impact of the age structure of fixed assets on the expansion multiplier value factoring in various methods of calculating depreciation. The research methods include mathematical and computer modelling, as well as deductive logic as a process of reasoning from more general to more specific. The high depreciation of fixed assets of Russian enterprises and the high demand for depreciation as a source of funds for their renewal and extended reproduction ensure the relevance of the study. The results of the study include the models of extended reproduction of fixed assets due to the expansive depreciation effect using various methods of accruing depreciation; demonstrate the relationship between the age structure of fixed assets and the expansion multiplier. Generalizing the methods of depreciation in terms of their impact on the expansion multiplier values provides the scientific novelty of the research. This paper introduces the expansion multiplier calculation formulas for general and special accelerated depreciation and limits of multiplicative potential of accelerated depreciation. The conclusions of the research work illustrate the possibility of using the expansion multiplier to plan and optimize the depreciation policies of organizations, as well as to evaluate the multiplier of fixed assets in various economies. The authors identified the problems of applying the expansive depreciation effect as a means of extended reproduction of fixed assets in practice, as a result of the limitations of its theoretical models. In overcoming the identified limitations, areas of technical theoretical research are proposed.