Abstract: Abstract. This paper investigates the consequences of changes in tax rates for companies that perform government contracts. Based on the case study of the company participating in road construction, it analyzes the changes in the accumulation of capital with an increase of VAT rates from 18 to 20% and personal income tax from 13 to 15%, respectively. The interest to that topic is provoked by, on the one hand, the discussion of the possibility of such an increase, and on the other hand, by the need to find a balance between supporting entrepreneurship and filling the budget. For a quantitative estimation of the impact of higher interest rates, the work uses the performance indicators of existing enterprise and data on public procurement. A small company is engaged in construction and repairs of roads, and to expand its activities the company needs some additional equipment that could be provided through leasing or purchased with bank loan. The equipment is used for works on government contracts which provide for all payments. The cash flow is exposed to the risks such as defeat in the competition, broken equipment or schedule breakdown. When in the course of its activities, the company is facing losses, it takes out short-term loans. To assess the changes in the retained earnings amount which is accumulated on the settlement account and can be used, for example, for investment, the research uses simulation modeling. Modeling with the software package Cristal Ball has shown that that the increase in VAT up to 20% and 15% in personal income tax may reduce the accumulations of enterprises to minimum 8% over a 5-year period in nominal terms. It should be noted that the estimation does not take into account changes in interest rates of the financial sector. So far all estimates of the increase in tax rates are macroeconomic indicators while the present work attempts to match an increase in tax rates and supporting mechanism of the state order.

Keywords: scenario analysis, risks, leasing, tax reform, simulation, construction, tax policy, government procurement, accumulation, investment

DOI: 10.7256/2454-065X.2015.2.66144

Abstract: This paper investigates the consequences of changes in tax rates for companies that perform government contracts. Based on the case study of the company participating in road construction, it analyzes the changes in the accumulation of capital with an increase of VAT rates from 18 to 20% and personal income tax from 13 to 15%, respectively. The interest to that topic is provoked by, on the one hand, the discussion of the possibility of such an increase, and on the other hand, by the need to find a balance between supporting entrepreneurship and filling the budget. For a quantitative estimation of the impact of higher interest rates, the work uses the performance indicators of existing enterprise and data on public procurement. A small company is engaged in construction and repairs of roads, and to expand its activities the company needs some additional equipment that could be provided through leasing or purchased with bank loan. The equipment is used for works on government contracts which provide for all payments. The cash flow is exposed to the risks such as defeat in the competition, broken equipment or schedule breakdown. When in the course of its activities, the company is facing losses, it takes out short-term loans. To assess the changes in the retained earnings amount which is accumulated on the settlement account and can be used, for example, for investment, the research uses simulation modeling. Modeling with the software package Cristal Ball has shown that that the increase in VAT up to 20% and 15% in personal income tax may reduce the accumulations of enterprises to minimum 8% over a 5-year period in nominal terms. It should be noted that the estimation does not take into account changes in interest rates of the financial sector. So far all estimates of the increase in tax rates are macroeconomic indicators while the present work attempts to match an increase in tax rates and supporting mechanism of the state order.

Keywords: scenario analysis, risks, leasing, tax reform, simulation, construction, tax policy, government procurement, accumulation, investment

DOI: 10.7256/2454-065X.2015.2.12919

Abstract: Abstract. The article discusses the theoretical issues and practice of the use of penalties in the tax legal relations as a means to make the required payments by the taxpayer as well as relative enforcement measures. The study identifies the targeted or functional destination of penalties. The implementation mechanism is investigated through consideration of stimulating function. It is concluded that the negative component of this function is clearly insufficient; charging penalties is not really a threat due to the low fiscal rate and the absence of negative stress or adverse consequences for the taxpayer's property. Attention is drawn to the positive component of the stimulating function which is implemented through the mechanism of incentives and preferences for the taxpayer. The work analyzes the legal nature of penalties; the grounds generating the obligation to pay them and associated legal implications; the restorative (compensatory) and accessory nature of penalties. The author raises the problem of differentiated approach based on the form of ownership to determine the pecuniary consequences of late repayment of unjustly acquired funds (savings). The work points to the “bottlenecks” in the regulation of this institution and suggests possible solutions.

Keywords: sanction, legal liability, arrears, stimulating function, enforcement measures, legal nature of penalties, means to fulfill obligation, tax liability, compensatory (restorative) relations, accessory nature

DOI: 10.7256/2454-065X.2015.2.66145

Abstract: The article discusses the theoretical issues and practice of the use of penalties in the tax legal relations as a means to make the required payments by the taxpayer as well as relative enforcement measures. The study identifies the targeted or functional destination of penalties. The implementation mechanism is investigated through consideration of stimulating function. It is concluded that the negative component of this function is clearly insufficient; charging penalties is not really a threat due to the low fiscal rate and the absence of negative stress or adverse consequences for the taxpayer's property. Attention is drawn to the positive component of the stimulating function which is implemented through the mechanism of incentives and preferences for the taxpayer. The work analyzes the legal nature of penalties; the grounds generating the obligation to pay them and associated legal implications; the restorative (compensatory) and accessory nature of penalties. The author raises the problem of differentiated approach based on the form of ownership to determine the pecuniary consequences of late repayment of unjustly acquired funds (savings). The work points to the “bottlenecks” in the regulation of this institution and suggests possible solutions.

DOI: 10.7256/2454-065X.2015.2.13073

Abstract: Abstract. The paper examines trends in tax regulation and their impact on the economy of Russian agribusiness industry as well as recent political, economic and institutional changes that contributed to create favorable conditions and gave an impetus to the revival, shaping and development of the agricultural sector. The author notes that among numerous problems hampering the efficient and sustainable development of business entities in rural areas, the problem of optimal taxation of agribusiness is of crucial importance. The author argues that the existing taxation system does not properly function and in light of the national policy aimed to support domestic producers and implement fiscal reform, it should be revised and adjusted. The methodological basis of the research involves fundamental concepts set out in the works of Russian and foreign scientists, legislative and regulatory acts of public authorities, federal laws, decrees of the President and the RF Government, materials of scientific and practical conferences on the issues of taxation of agricultural producers. The work uses such methods as abstract logic, monographic, statistical and economic, economic-mathematical and other methods of economic research. The scientific novelty of the research lies in theoretical and methodological substantiation and identification of the characteristics of taxation of agricultural enterprises; suggestion to use multiple tax regimes taking into consideration the fact of seasonal production and the gap between production costs and return and to provide an efficient state regulation of agribusiness industry through offering tax benefits and using various stimulating measures. In addition, the article assesses the current level of the tax burden on enterprises of the agrarian sector of Russia and argues that the real sector of the Russian economy is in a difficult financial situation which proves that the limit of taxation should be determined taking into consideration the industry sector where the agricultural enterprise belongs as well as such factors as: the production volume and costs structure, the rate of capital turnover, etc.

Keywords: tax revenues, tax burden, agribusiness industry, tax system, agriculture, tax regulation, GDP, VAT, income tax, UAT

DOI: 10.7256/2454-065X.2015.2.66146

Abstract: The paper examines trends in tax regulation and their impact on the economy of Russian agribusiness industry as well as recent political, economic and institutional changes that contributed to create favorable conditions and gave an impetus to the revival, shaping and development of the agricultural sector. The author notes that among numerous problems hampering the efficient and sustainable development of business entities in rural areas, the problem of optimal taxation of agribusiness is of crucial importance. The author argues that the existing taxation system does not properly function and in light of the national policy aimed to support domestic producers and implement fiscal reform, it should be revised and adjusted. The methodological basis of the research involves fundamental concepts set out in the works of Russian and foreign scientists, legislative and regulatory acts of public authorities, federal laws, decrees of the President and the RF Government, materials of scientific and practical conferences on the issues of taxation of agricultural producers. The work uses such methods as abstract logic, monographic, statistical and economic, economic-mathematical and other methods of economic research. The scientific novelty of the research lies in theoretical and methodological substantiation and identification of the characteristics of taxation of agricultural enterprises; suggestion to use multiple tax regimes taking into consideration the fact of seasonal production and the gap between production costs and return and to provide an efficient state regulation of agribusiness industry through offering tax benefits and using various stimulating measures. In addition, the article assesses the current level of the tax burden on enterprises of the agrarian sector of Russia and argues that the real sector of the Russian economy is in a difficult financial situation which proves that the limit of taxation should be determined taking into consideration the industry sector where the agricultural enterprise belongs as well as such factors as: the production volume and costs structure, the rate of capital turnover, etc.

Keywords: tax revenues, tax burden, agribusiness industry, tax system, agriculture, tax regulation, GDP, VAT, income tax, UAT

DOI: 10.7256/2454-065X.2015.2.13081

Abstract: Abstract. In recent years in Russia despite the active state support there has been a decline in the development of small and medium-sized enterprises. In line with the national tax policy, stimulation of the development of small and medium-sized businesses can be achieved through special methods of tax regulation in the regions. In this connection, there is a need to theoretically analyze the regional SME taxation system as an object of regional financial management. Despite numerous and extensive research of regional taxation systems within the theory of taxation, there is no generally accepted method for evaluating the performance of such systems, especially of regional systems for SME taxation. In this light, the regional SME taxation system as an object of regional financial management deserves special attention in order to work out the evaluation methods as well as proper corrective measures. The obtained results can summarized as follows: 1) the work identifies the system elements of the regional SME taxation system, their functions, inter-relation and interaction; 2) the study recognizes and explains peculiarities of the regional SME taxation system functioning on the territory of the independent subject of the Russian Federation; 3) the authors point to objective and subjective factors that influence the fiscal performance of the regional SME taxation system; 4) the research work further extends and clarifies qualitative functions of the regional SME taxation system; 5) the paper describes an algorithm of the evaluation methodology to measure the effectiveness of regional SME taxation system; 6) the paper shows the results of applying one block of the methodology to assess the effectiveness of the regional SME taxation system through case study of regional small businesses.

Keywords: medium-size business, taxation system, region, indicator, tax regime, methodology, small business, factor, fiscal performance, effectiveness

DOI: 10.7256/2454-065X.2015.2.66147

Abstract: In recent years in Russia despite the active state support there has been a decline in the development of small and medium-sized enterprises. In line with the national tax policy, stimulation of the development of small and medium-sized businesses can be achieved through special methods of tax regulation in the regions. In this connection, there is a need to theoretically analyze the regional SME taxation system as an object of regional financial management. Despite numerous and extensive research of regional taxation systems within the theory of taxation, there is no generally accepted method for evaluating the performance of such systems, especially of regional systems for SME taxation. In this light, the regional SME taxation system as an object of regional financial management deserves special attention in order to work out the evaluation methods as well as proper corrective measures. The obtained results can summarized as follows: 1) the work identifies the system elements of the regional SME taxation system, their functions, inter-relation and interaction; 2) the study recognizes and explains peculiarities of the regional SME taxation system functioning on the territory of the independent subject of the Russian Federation; 3) the authors point to objective and subjective factors that influence the fiscal performance of the regional SME taxation system; 4) the research work further extends and clarifies qualitative functions of the regional SME taxation system; 5) the paper describes an algorithm of the evaluation methodology to measure the effectiveness of regional SME taxation system; 6) the paper shows the results of applying one block of the methodology to assess the effectiveness of the regional SME taxation system through case study of regional small businesses.

Keywords: medium-size business, taxation system, region, indicator, tax regime, methodology, small business, factor, fiscal performance, effectiveness

DOI: 10.7256/2454-065X.2015.2.14355

Abstract: Abstract. Providing tax benefits is one of the methods for state regulation of social and economic processes. The choice of research topic was influenced by such factors as the lack of scientifically based tax incentives theory with well-defined and complete classification adapted to the current Russian legislation; unclear benefits provisions dispersed in the RF legislation on taxes, and the problems linked to methods to assess the effectiveness of tax benefits. The purpose of the article is to summarize the approaches to the structure and content of the basic elements of the methodology for assessment of the tax benefits taking into account the tax structure which is referenced to the tax legislation of the Russian Federation and the concept of tax expenses. The work highlights the basic elements of the methodology for assessing the effectiveness of tax incentives and their general characteristics. The paper shows that there is a need to create and use a general classifier of tax benefits. For the first time the study attempts to give a brief critical analysis of the evaluation procedure applied in Yoshkar-Ola (the Mari El Republic) to evaluate fiscal and social effectiveness of tax benefits offered at the local level. Research material may find practical application in the development of a single methodology for assessing the effectiveness of tax benefits, as well as in the activities of executive bodies involved in monitoring of the effectiveness of tax benefits.It is concluded that every provision of the existing regulations governing the monitoring of tax benefits should be carefully examined with the aim of further improvement. The procedure of tax benefits canceling should be smooth, it should be based on the results of assessment of tax benefits effectiveness. Moreover, the assessment should be conducted by the authorized body acting in compliance with a single methodology.

Keywords: effectiveness assessment, monitoring steps, principles for offering benefits, tax basic structure , regulatory tax structure, tax benefits, budgetary tax expenses, elements of the methodology, tax regulation, fiscal performance

DOI: 10.7256/2454-065X.2015.2.66148

Keywords: effectiveness assessment, monitoring steps, principles for offering benefits, tax basic structure, regulatory tax structure, tax benefits, budgetary tax expenses, elements of the methodology, tax regulation, fiscal performance

DOI: 10.7256/2454-065X.2015.2.12790

Abstract: Abstract. The research considers the following issues: theories, concepts of European tax law on direct and indirect taxation; norms of the national financial law and the European law governing direct and indirect taxation in the EU Member States; the practice of EU Court of Justice in disputes relating to the matters of taxation, tax harmonization and tax sovereignty. The work points to several important things which represent the starting point for European integration in the field of tax law, in particular: tax harmonization in direct and indirect taxes, prohibition of discrimination and restrictions of the conference, as well as the leading role of fundamental freedoms for European integration. The EU Court decisions which became paradigmatic in the European tax law are given as examples of judicial practice. The methodological basis consists of general scientific methods (dialectical materialistic, systemic, induction, deduction, analysis, synthesis), and legal research methods. At the heart of the study is a comparative legal method allowing to identify legal issues that exist in the European legislation as well as to find the best ways to solve them. The research also employs specific methods: legalistic, historical and legal. On the basis of the latest EU legislation and court practice in the EU, a comprehensive comparative legal study of tax harmonization in the field of direct and indirect taxes within the EU was carried out. The positive and negative integration is a tool used by the European Union to eliminate tax frontiers within the common market. Today’s achievements in harmonization of indirect taxes are obvious. The unification in the field of direct taxes has so far succeeded in a lesser degree, but thanks to such important directives as prohibition of discrimination of fundamental freedoms, the Court of Justice has created a number of important precedents that have become sources of the European tax law. The fact of the sovereignty of Member States significantly influences interpreting and enforcement matters in the field of direct taxes. It would be optimal to find a position within the Union in the middle between unlimited policy to reduce taxes and complete association of tax rates. It could start the harmonization of the tax base for taxation of enterprises.

Keywords: European tax law, direct taxes, indirect taxes, tax harmonization, European Court of Justice, court practice, tax sovereignty, comparative law, European Union, Directive

DOI: 10.7256/2454-065X.2015.2.66149

Abstract: The research considers the following issues: theories, concepts of European tax law on direct and indirect taxation; norms of the national financial law and the European law governing direct and indirect taxation in the EU Member States; the practice of EU Court of Justice in disputes relating to the matters of taxation, tax harmonization and tax sovereignty. The work points to several important things which represent the starting point for European integration in the field of tax law, in particular: tax harmonization in direct and indirect taxes, prohibition of discrimination and restrictions of the conference, as well as the leading role of fundamental freedoms for European integration. The EU Court decisions which became paradigmatic in the European tax law are given as examples of judicial practice. The methodological basis consists of general scientific methods (dialectical materialistic, systemic, induction, deduction, analysis, synthesis), and legal research methods. At the heart of the study is a comparative legal method allowing to identify legal issues that exist in the European legislation as well as to find the best ways to solve them. The research also employs specific methods: legalistic, historical and legal. On the basis of the latest EU legislation and court practice in the EU, a comprehensive comparative legal study of tax harmonization in the field of direct and indirect taxes within the EU was carried out. The positive and negative integration is a tool used by the European Union to eliminate tax frontiers within the common market. Today’s achievements in harmonization of indirect taxes are obvious. The unification in the field of direct taxes has so far succeeded in a lesser degree, but thanks to such important directives as prohibition of discrimination of fundamental freedoms, the Court of Justice has created a number of important precedents that have become sources of the European tax law. The fact of the sovereignty of Member States significantly influences interpreting and enforcement matters in the field of direct taxes. It would be optimal to find a position within the Union in the middle between unlimited policy to reduce taxes and complete association of tax rates. It could start the harmonization of the tax base for taxation of enterprises.