Financial Journal Vol.14 No.3 2022
Favorable Tax Treatment of Russian Software Companies and its Evolution from the Choice of Preferences to the Tax Maneuver in IT industry, p. 8-27
IT industry is noticeably distinguished by the tax support provided to it in the Russian economy. Nowadays software companies are treated as main contributors to national technological breakthrough being one of the main priorities of federal tax policy. Tax maneuver of 2021 significantly changed well-known tax rules, but some of novelties became a logical development of previously implemented measures. We systematize them by following our classification that introduces three main phases, all of which provided a qualitative update of the previous taxation framework, and for analysis consider particular reliefs as a unified, specific tax regime integrated in the general taxation system. The purpose of the article is to identify priorities and evaluate effectiveness of mechanisms designed to stimulate IT companies, including a preliminary assessment of valid perimeter and performance of the maneuver. Obtained results indicate that the tax regime initially given to software business had a bad design, an extremely narrow scope of beneficiaries and, due to this, a little effect on the IT industry; modernization of that design with the revision of basics was necessary at least in order to stop the decline of IT industry in the part of small companies. However, the main trend of recent tax policy demonstrates a strengthening of sustainable business with comparative fall of competitiveness of beginning entrepreneurs. In sum, the tax maneuver has a positive economic impact but covers, according to our estimates, less than 20% of IT companies.
Keywords: IT company, IT industry, corporate income tax, tax relief, tax regime, tax incentive, software business
JEL: E62, H32, K34
For citation: Gromov V.V. (2022). Favorable Tax Treatment of Russian Software Companies and its Evolution from the Choice of Preferences to the Tax Maneuver in IT industry. Financial Journal, vol. 14, no. 3, pp. 9–27 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-9-27.
© Gromov V.V., 2022
E.N. Timchenko, A.I. Pogorletsky
Property Taxation: Transformational Changes in the Digital Era and Impact of the COVID-19 Pandemic, p. 28-43
The timeliness of this research is determined by the large-scale changes taking place in the world economy under the influence of digitalization, which accelerated during the COVID-19 pandemic. These processes affect the direction of transformational changes in property taxation. The object of the study is property taxation in the context of the proliferation of various forms of digital assets, which are virtual property. The purpose of the article is to find correlations between digitalization, the need to limit overconsumption, which has increased during the pandemic of a new coronavirus infection, and the prospects for changes in property taxation. The possibilities of state tax regulation and interstate cooperation in the context of property taxation are considered. The prospects for expanding the effect of property taxation to the virtual spaces of the metauniverse are highlighted. The article uses general scientific research methods such as analysis, synthesis, generalization and analogy, and contains historical and cross-country comparison. The information base is formed on the basis of data from international organizations, consulting, analytical and research companies, as well as government agencies. As a result of the research, the hypothesis was confirmed that the current changes in the global economy require transformation of approaches to property taxation both at the state and international levels, taking into account the expansion of modern technology capabilities and the need to limit excessive consumption. Recommendations have been formulated to expand the scope of property taxation in virtual spaces and to increase the level of the wealth taxation of the wealthiest segments of the population possessing virtual forms of ownership.
Keywords: taxes, property taxation, virtual assets, COVID-19 pandemic, digitalization
JEL: H24, H25, H30, L86
For citation: Timchenko E.N., Pogorletsky A.I. (2022). Property Taxation: Transformational Changes in the Digital Era and Impact of the COVID-19 Pandemic. Financial Journal, vol. 14, no. 3, pp. 28–43 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-28-43.
© Timchenko E.N., Pogorletsky A.I., 2022
M.G. Girich, K.V. Ivanovicheva, A.D. Levashenko
Taxation and Social Insurance for Employees of Online Platforms: Comparison of Russian and International Experience, p. 44-60
The issue of online platforms’ employment is topical due to the emergence of questions of application of labor law, taxation and social insurance to such persons providing services via platforms. The purpose of this article is to develop recommendations regarding the regulation of relations arising between the platform and its employee in Russia, including the application of labor and business legislation, taxation and social insurance of such persons, taking into account the comparison of the legal regulation in Russia and in foreign countries. The methodology of the work is based on a comparative legal analysis of legal documents in foreign countries (Spain, Great Britain, Italy, France) and Russia. One of the international trends in the regulation of employment on online platforms is the application of labor laws to regulate the relationship between the employee and the platform, or the introduction of a special status of a “quasi-employee” with the provision of platforms with certain obligations to ensure the employment rights of employees. In Russia, the legal status of platform employees is not defined, it is not defined, e.g. whether a person is an employee, an entrepreneur, or a legal entity. For tax purposes, platform employees are usually self-employed (professional income taxpayers), so the article compares the approaches to taxation of such employees in Russia and in foreign countries. Furthermore, the selfemployed in Russia cannot pay social insurance contributions; the article discusses the approaches of foreign countries to social insurance of the self-employed, as well as the issue of the emergence of platforms’ obligations for social insurance of their employees, considering the application of labor law to the activities of those platforms.
Keywords: online platforms, employment, OECD, taxation, social insurance, self-employed
JEL: K31, K34
Funding: The article was prepared based on the results of research work within the framework of the state task of the RANEPA.
For citation: Girich M.G., Ivanovicheva K.V., Levashenko A.D. (2022). Taxation and Social Insurance for Employees of Online Platforms: Comparison of Russian and International Experience. Financial Journal, vol. 14, no. 3. pp. 44–60 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-44-60.
© Girich M.G., Ivanovicheva K.V., Levashenko A.D., 2022
A.F. Kireyeva, M.R. Pinskaya
Providing Incentives for Intellectual Labor through Tax Policy in Belarus, p. 61-73
This paper discusses the idea of providing tax incentives for scholars and researchers as a necessary factor in the formation of innovative environment. The research aims at formulating proposals for increasing income from intellectual work through tax incentives based on the analysis of scientific research context and existing tax regime for Belorussian researchers. It is argued that the quantity and quality of intellectual labor depend on the tax regime applied. Academic science environment in Belarus is analyzed and the mechanism of taxation of researchers’ income is discussed in its context. The structure of current costs for research and development is demonstrated. Authors show the insufficiency of the existing tax incentives for intellectual labor, including research grants. The analysis is focused on the mechanism of taxation and collection of social insurance contributions from the remuneration of members of temporary research teams. The authors propose to introduce special tax rules for research income from research activities, and consider these possible rules in detail. The theoretical framework of this article is based on the research of national and foreign scholars in the fields of taxation theory, taxation of individuals, and intellectual capital.
Keywords: tax policy, tax incentives, taxation of labor, research incentives, taxation of grants
JEL: H20, H24
For citation: Kireyeva A., Pinskaya M. (2022). Providing Incentives for Intellectual Labor through Tax Policy in Belarus. Financial Journal, vol. 14, no. 3, pp. 61-73.
© Kireyeva A., Pinskaya M., 2022
O.A. Sinenko, A.Yu. Domnikov
Property Taxation of Companies in Territories With a Special Economic Status, p. 74-85
The article is devoted to the study of fiscal mechanisms of regulation of property taxation in the territories with a special economic status. The purpose of this work is to analyze the specifics of property taxes, to assess the value and structure of tax preferences provided, as well as to identify trends in property taxation of companies within the territories with a special economic status. The paper explores the features of property taxation within these territories both in Russia and in foreign countries. It is concluded that in foreign practice tax preferences on property taxes are applied mainly to high-tech companies in special territories. The article analyzes the tax preferences for property taxes in Russia granted to the residents for the period of functioning of special economic zones, territories of advanced socio-economic development and the Free Port of Vladivostok.
Keywords: property taxes, tax incentives, territories with special economic status
JEL: H20, H21, H25
For citation: Sinenko O.A., Domnikov A.Yu. (2022). Property Taxation of Companies in Territories With a Special Economic Status. Financial Journal, 2022, vol. 14, no. 3, pp. 74–85 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-74-85.
© Sinenko O.A., Domnikov A.Yu., 2022
E.V. Ryabova, N.V. Feruleva, O.A. Zamotaeva
Assessing the Investment Attractiveness of Oil Field Development Projects under the Tax Maneuver: The Evidence from West Siberia, p. 86-101
The West Siberian economic region remains a territory with high potential of liquid hydrocarbons production, which serve as a reserve for long-term development not only for this region, but for Russia as a whole. Experts claim that Western Siberia provides 70% of Russia’s oil production and accounts for 61% of the mineral extraction tax revenues. According to forecasts of the Ministry of Energy, if oil production is not stimulated, then by 2035 the volume of oil production will significantly reduce and budget revenue will decrease by 4.1 trillion rubles. At present, in order to increase the investment attractiveness of the industry, changes in tax and customs legislation are being introduced. However, the effects of the reforms are not obvious. Employing scenario analysis, the case method and financial modeling on the basis of publicly available information, we assess the impact of changes in tax and customs legislation on the investment attractiveness of oil field development projects. The main hypothesis of the study about the positive impact of the tax maneuver on the attractiveness of projects was partially confirmed. However, in all considered scenarios the internal rate of return does not exceed 13%. This is significantly lower than the global average rate of return for oil and gas industry. This points to the need for further adjustments to the tax and customs legislation to ensure sustainable growth and development of the oil and gas industry. The model created to assess the impact of alternative tax regimes on the investment attractiveness of hydrocarbon exploration and development projects can also be used to identify potential benefits and tax consequences for both the investor and the state.
Keywords: tax maneuver, tax on additional income, export duty, tax legislation, efficiency of investment project, oil fields, West Siberian economic region, investment attractiveness, oil industry
JEL: H22, H32, G17, G38
For citation: Ryabova E.V., Feruleva N.V., Zamotaeva O.A. (2022). Assessing the Investment Attractiveness of Oil Field Development Projects under the Tax Maneuver: The Evidence from West Siberia. Financial Journal, 2022, vol. 14, no. 3, pp. 86–101 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-86-101.
© Ryabova E.V., Feruleva N.V., Zamotaeva O.A., 2022
S.V. Bogachov, S.I. Kravchenko
Financial and Tax Regulation of the Housing and Utilities Sector: Foreign Experience, p. 102-115
The article is devoted to solving the urgent task of the expanding the sources of extrabudgetary funding of the housing and utilities secor through the use of elements of tax regulation. The purpose of the study is to analyze and summarize the literature on foreign experience in financing and tax regulation of the housing and communal sphere and to assess the possibilities of its application in Russian practice. Methods of comparison, grouping, logical generalization, tabular presentation of data, expert evaluations were used for the study. As a result of the research, the features of the housing and utilities sphere as an object of financial and tax regulation were revealed. The authors characterized the models and methods of financing of sector used in the EU countries, the USA, China and India, including the degree of state intervention, distribution of powers and responsibilities by management levels, use of the mechanism of publicprivate partnership, creation of joint ventures with foreign capital, issue of infrastructure bonds, implementation of energy saving programs. The approaches to issuing municipal infrastructure bonds in the U.S. and India are presented. Attention is focused on the differences in the distribution of EU countries in terms of the volume and structure of the use of the public-private partnership mechanism. The sources of financing for the implementation of energy efficiency projects in the EU countries are systematized. The article analyzes the foreign practice of tax regulation to increase the investment attractiveness of financial instruments in the modernization of utility infrastructure facilities, exemption from taxation of municipal infrastructure bonds in the United States and India, and improving energy efficiency in the housing sector through the use of tax incentives for the implementation of energy efficiency projects and energy service contracts in Italy, the Netherlands, Romania, Slovenia, the Czech Republic and Sweden. The article also substantiates the possibilities of adapting those methods of financial and tax regulation of infrastructure bonds turnover and implementation of energy service contracts to expand non-budgetary sources of the housing and communal sphere financing in the Russian Federation.
Keywords: housing and communal sphere, financial and tax regulation, foreign experience, publicprivate partnership, infrastructure bonds, energy efficiency projects, energy service contracts
JEL: E62, H54, K34
For citation: Bogachov S.V., Kravchenko S.I. (2022). Financial and Tax Regulation of the Housing and Utilities Sector: Foreign Experience. Financial Journal, vol. 14, no. 3, pp. 102–115 (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-102-115.
© Bogachov S.V., Kravchenko S.I., 2022
P.P. Baboshkin, A.Yu. Mikhailov, Z.A. Sheikh
Sustainable Cryptocurrency Growth Impossible? Impact of Network Power Demand on Bitcoin Price, p. 116-130
Due to the youth of the cryptocurrency sphere, the logic of interaction between investors, users and protocols is not always precisely defined. Analysis of the impact of ESG on cryptocurrencies proves that the demand for bitcoin network capacity (occupies the main market share) is the main factor in predicting the price of this cryptocurrency and the cryptocurrency market as a whole. The choice of the statistical method of analysis is determined by the purpose of statistically justified determination of the relationship of the data under consideration, and the reliability of the analysis is checked using Fischer and Student tests. In this paper, several innovations are proposed to solve the problem of energy dependence of cryptocurrencies: firstly, the analysis of cryptocurrencies in the paradigm of sustainable development (taking into account the consumption of a huge amount of energy for the functioning of cryptocurrency systems); secondly, feedback logic to explain the interaction of subjects, including the following parties: users, developers, network infrastructure and their interaction; thirdly, statistical analysis with the creation of artificial variables from real data and iterative improvement of the model. This paper proves that sustainable cryptocurrency growth is impossible when viewed from the perspective of “Green Economics” by Molly Scott Cato. The author's approach is relevant compared to other methods of linear transformations for creating artificial variables by selecting data using the VIF test. As a result, several versions of models were obtained using various combinations of the initially proposed factors, on the basis of which the nature of the greatest influence on the price of bitcoin was established in the form of technical factors and energy infrastructure needs.
Keywords: cryptocurrency, investor behavior, bitcoin, data privacy, ESG factors, concept of green economy
JEL: E52, Q43
For citation: Baboshkin P.P., Mikhaylov A.Yu., Shaikh Z.A. (2022). Sustainable Cryptocurrency Growth Impossible? Impact of Network Power Demand on Bitcoin Price. Financial Journal, vol. 14, no. 3, pp. 116–130. https://doi.org/10.31107/2075-1990-2022-3-116-130.
© Baboshkin P.P., Mikhaylov A.Yu., Shaikh Z.A., 2022