Corporate income tax gap estimation in the context of development of fiscal space

The article is devoted to the analysis of the corporate income tax gap as one of the indicators that characterizes the tax revenues that a country can accumulate accounting for its economic potential. The author summarizes the main theoretical views on the causes of the tax gap and investigates existing methodological approaches to assess the tax gap on corporate income tax in OECD countries. The article estimates the income tax gap under the OECD Revenue Administration - Gap Analysis Program, which is based on determining potential tax revenues by adjusting the aggregate indicators of the system of national accounts (gross output, mixed income), which, according to the analysis, averaged at 1.4% GDP in the period 2017-2019, which shows a potential for the development of the fiscal space of Ukraine. Upon analysis of the distribution of the tax gap between institutional sectors of the economy, the largest gap in income tax was found in the sector of foreign corporations whose potential tax revenues were estimated as tripled relative to the declared tax revenues accrued in the Consolidated Budget of Ukraine in 2018. The author conducted a comprehensive analysis of the effectiveness of corporate income tax in Ukraine on the basis of tax efforts and budget efficiency ratios, which revealed significant weaknesses in comparison with similar indicators in other countries. The main measures aimed at eliminating tax gaps in OECD countries are summed up and recommendations are made for Ukraine.

Data Localization and the National Treatment Obligation in International Investment Treaties

Data localization hurts foreign investment and brings potential economic advantages to domestic corporations relative to foreign corporations. This leads to the argument that data localization violates the national treatment principle in international investment treaties. By applying the ‘three-step’ approach to assess the legality of data localization with respect to the national treatment principle, this article finds that the legality of data localization depends on certain circumstances, including the domestic catalogues of foreign investment, the definition of data localization in domestic legislation, and whether international investment treaties explicitly or implicitly incorporate data protection through exceptions for the protection of the state's essential security interests, public order, or public morals. China's acceleration of its legislation processes to regulate cross-border data transfer has significant implications for the negotiations and modifications of Chinese international investment treaties.

Controlled foreign companies of Russian residents in the context of world trends

The subject of this article is financial relations of the state and its tax residents with foreign assets (stock), as well as control over such companies through various legal mechanisms. The authors examined the main global trends in the development of legislation on controlled foreign corporations, as well as characteristics of tax systems that may contribute to such norms introduction. It was found that implementation of international multilateral agreements such as CRS MCAA and CBC MCAA in the field of tax control enhances development of anti-offshore regulation, including legislation on controlled foreign corporations. Particular attention is paid to the comparative legal analysis of the controlled foreign companies (CFC) rules in 15 jurisdictions, including the Russian Federation and identification of similar and specific rules. As a result of the research, the authors came to the conclusion that Russia is following the world trends, although at this stage it is not the country that forms them. In the future, to successfully apply the CFC legislation in the Russian Federation, it will be necessary to improve the existing norms , increase the efficiency of tax administration and improve the legal status of taxpayers.

Income Tax Complexity Faced by Multinational Corporations: A Comparative Study of Canada, the United States, and Other Selected OECD Countries

This study examines the complexity of Canada's corporate income tax system from the perspective of multinational corporations and compares it with the complexity of the US system, also taking into account measures of complexity for 19 other member countries of the Organisation for Economic Co-operation and Development (OECD). The author finds that with regard to the Canadian tax code, the most complex laws are those on corporate reorganization, transfer pricing, and controlled foreign corporations, and with regard to the Canadian tax framework, the most complex areas are tax audits, tax-law enactment, and tax guidance. In comparison with other OECD countries, Canada is remarkably similar to the United States. Both countries have a medium level of overall complexity, and both have a more complex tax code but a less complex tax framework than other countries. However, a closer examination of the Canadian and US tax codes and tax frameworks reveals some significant differences in complexity levels, particularly in respect of certain tax laws.

Party-State Capitalism in China

China’s economic model, commonly described as “state capitalist,” is now better characterized as party-state capitalism, in which the political survival of the Communist Party trumps developmental goals. Its tools for managing the economy include not only state ownership and market interventions, but increasing use of party-state power to discipline private capital. China’s entrepreneurs are now expected to adhere to the party line, as are foreign corporations operating in the country. The shift is fueling a backlash from foreign governments that view the fusion of state and private interests in China as a threat to their own national security.

Repurposing Institutions: Trust Offices and the Dutch Financial System, 1690s–2000s

Since the late seventeenth century, trust offices (administratiekantoren) that repackage securities have been a central institution in Dutch finance. Their basic form and functioning have remained largely the same, but over time, the repackaging has come to serve different purposes. Originally set up for administrative convenience, they helped to create liquidity, notably for foreign securities. From the 1930s, their primary purpose became to shield directors of large corporations from shareholder influence and hostile takeover threats. Subsequently, the trust offices evolved from general-purpose administrative units into dedicated foundations closely tied to individual companies and increasingly popular with foreign corporations as cheap anti-takeover devices. Their reincarnation as foundations also turned them into vehicles for the tax-efficient routing of international revenue flows via the Netherlands.

The Relevance of The Value System in the Performance of Multinational Companies in Karachi, Pakistan

This paper aims to explore the multinational companies operating in Pakistan that are convincingly aware of Islamic, cultural, and ethical values. To study a sample survey designed to gather and analyze information on the significance of these values? Do non-Muslim Pakistani multinational executives have scant knowledge of cultural, religious, and moral values? Is the impact of the existence of multinational companies on the local culture of Western values? Do the expectations differ to some degree from those of the locals? Will the contribution of foreign corporations to the host countries make a meaningful contribution to the socio-economic stability and economic growth of the host country? Will the perception of the administrators of global corporations vary from that of multinational clients? The targeted survey consists of two categories, i.e. multinational managers and multinational clients, and found that multinational managers are mainly Muslim in the education sector, while 96 percent of multinational respondents have been residing in the residential sector since birth. When the Asian financial crunch severely affected the region, transnational businesses played a significant role in the rebuilding of Pakistan's economy and caused a considerable export-oriented character in economic development, the economy recovered rapidly compared to any other region with the aid of multinational companies.

Intelligent technologies in the practice of the oil and gas sector

The oil and gas sector is among the leaders of the domestic industry in terms of the number of digital technologies being implemented. The complex technological chain of mining and processing industries is gradually moving into a system of intelligent management based on Digital Analytics. It is digital techniques of influencing the subject of management on an object, which gradually acquire algorithmized character, that become the head of scientific research and development of specialists in almost all sectors of the economy.The article gives characteristics of digital tools for organizing and managing oil and gas production, describes the experience of domestic and foreign corporations in the development and application of information and communication technologies by covering the processes of supply, processing raw materials and sales of finished products. By summarizing the advanced achievements in building effective economic ties, the paper describes digital technologies as elements of a structural-functional approach with an emphasis on the possibilities and limitations of integrating technologies from industry leaders. The study proposes the author’s vision of the systematization of approaches in the field of “E-management” of oil and gas companies and their stakeholders, determined on the basis of the criterion for the effective development of the ecosystem of enterprises of the fuel and energy complex. As prospects for technological development in the direction of “E-management”, the expansion of the use of tools of intra-industry and intersectoral collaboration of resources, technological solutions, fixed assets based on macro-technological challenges is noted. The author concludes that “E-management”, as an innovative format of the production management system, contributes to sustainable development and growth of competitiveness of new generation industrial enterprises.

Law and Politics in FCPA Prosecutions of Foreign Corporations

The expansive reach of US prosecutions addressing corporate and economic crimes has piqued the interest of many commentators and scholars. This is perhaps nowhere more evident than in the enforcement of the US Foreign Corrupt Practices Act (“FCPA”) against non-American corporations. The US adopted the FCPA in 1977 to ban the payment of bribes to foreign public officials to obtain a business advantage—decades before most other countries did so and with jurisdiction over American and many foreign corporations. More than 40 years after the creation of the FCPA, this article reviews and outlines a growing interdisciplinary research agenda that considers historical, legal, and political influences on the application of the FCPA to foreign corporations. In addition to mapping the contours of this growing research agenda, the article identifies several challenges for such research and proposes potential avenues for future research that promise to deepen our understanding of why and when the US makes use of its expansive jurisdiction to prosecute foreign corporations for bribery of foreign public officials.