Comparative analysis of income tax and tax on the shown out capital: modern realities and prospects

Issue: № 5/3, 2020

Doi: https://doi.org/10.37634/efp.2020.5(3).3

The paper is devoted to the characterization and analysis of income tax in Ukraine at the present stage, as well as the issue of the level of tax burden, the level of all revenues to the state budget of Ukraine and all issues and problems associated with its management. The authors also examined the prospects for reform of this tax, its transformation into a tax on the withdrawn capital in the conditions of losses for enterprises and a decrease in economic indicators in general. The paper provides a comparative analysis of these two taxes and analyzes the impact of such a reform on the economy of the whole country. Also analyzed are European models of taxation of corporate profits in order to comply with international standards of Ukraine. At the present stage, the income tax is the main tax paid by legal entities, because making a profit is the main goal of any company, and such a tax can both promote development and cause quite big problems for business. At the same time, there is a lot of discussion and controversy about the transformation of the traditional income tax by the withholding tax, taking the example of Estonia. This issue is one of the most pressing now, because the transformation of the tax will have a strong impact on the state of our economy and will allow the business sector to develop with renewed vigor fairly quickly. The subject of this study is the tax on withdrawn capital, as well as how it affects the business of our country. The question of how to ensure reform in general and the transformation of income tax into withholding tax is still controversial and is often raised in the work of various experts. The paper describes and compares these two taxes (income tax and withheld capital tax), focusing on the problems and shortcomings of both taxes and ways to improve the situation.

Keywords : income tax, taxation of profit, tax loading, tax on the shown out capital, comparative analysis

References:

1. Tax Code of Ukraine: Law of Ukraine of 02.12.2010 № 2755-VI. URL: http://zakon3.rada.gov.ua/laws/show/2755-17 (in Ukrainian)

2. Withdrawn capital tax to replace income tax. URL: http://b2future.org.ua/#rec7917051 (in Ukrainian)

3. Comparative table to the draft Law of Ukraine on Amendments to the Tax Code of Ukraine regarding the withheld capital tax. URL: http://kmp.ua/wpcontent/uploads/2016/06/ ECT-comparative-table_-10_2016.pdf (in Ukrainian)

4. Explanatory note to the draft Law of Ukraine "On Amendments to the Tax Code of Ukraine on Tax on Withdrawn Capital". URL: http://kmp.ua/wpcontent/uploads/2016/06 /explanatory_note_ECT_-08_2016.pdf (in Ukrainian)

5. Draft Law of Ukraine "On Amendments to the Tax Code of Ukraine on Tax on Withdrawn Capital". URL: http://kmp.ua/wp-content/uploads/2016/06/ ECT-draft-law_10_2016.pdf (in Ukrainian)

6. Voitkova I.R., Holyshvska L.V. The essence of income tax and its stages of development. URL: http://www.rusnauka.com/ 10_NPE_2011/Economics/3_82780.doc.htm

7. State Treasury Service of Ukraine. URL: www.treasury.gov.ua (in Ukrainian)

8. Kopchynska K. Fiscal efficiency of corporate income taxation. Fiscal policy. 2014. URL: https://www.irbis-nbuv.gov.ua (in Ukrainian)

9. Minister of Finances: due to the introduction of a tax on withdrawn capital, the budget will initially lose up to 40 billion. URL: http://economics.unian.ua/finance/2117446-ministr-finansiv-cherez-vvedennya-podatku-navivedeniy-kapital-

10. Taptunova I.L. Transformation of corporate income tax into withheld capital tax. European Information Research Center. URL: www.kmp.ua. (in Ukrainian)

Download article