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2 Taxes and fees

2 Taxes and fees . Taxes and fees Functions of taxes Principles of taxation Tax benefits . Taxes and fees . Functions of taxes . Fiscal function (State budget forming)

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2 Taxes and fees

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  1. 2 Taxes and fees Taxes and fees Functions of taxes Principles of taxation Tax benefits

  2. Taxes and fees

  3. Functions of taxes • Fiscal function (State budget forming) • Social function (fair distribution of economic values between people by progressive scale of taxation, big share of indirect taxation of customers with a huge demand, tax preferences) • Control function (State control over business, people) • Regulating function (State can manage national economy, different kinds of business, different industries) - stimulating (industrial, geographical) - de-stimulating (industrial, geographical) - self-investing (investments stimulating)

  4. Principles of taxation • Are main ideas, basics of taxation, • Use everywhere (every industry, every region of the country) by same way • Legal • Can be changed only by law • Can be economical, legal and organizational

  5. Economical principles of taxation 1. Fair (pay tax only if You have a real income. ONLY INCOME? CASE STUDY – student and nurse, private clinic and nurse, student and nurse’s preferences) • Lorenz curve • 3 types of systems of taxation – progressive, regressive, neutral 2. Efficiency (tax – costs for taxation > 0) 3. Balance (Laffert curve) 4. Know-before (preventives)

  6. Legal principles of taxation • Total equality • Legality (law supremacy) • No “back-power” for tax laws, which increase tax burden of tax payer

  7. Organizational principles of taxation • Taxation unity • Taxes elasticity (can be changed, corrected) • Stability (in long-term) • Tax sums distribution between State and municipals • Transparency • “Only once” principle

  8. Legal base for taxation includes Core elements • Tax base (object for taxation, can be calculated by taxpayer or by State organs) • Tax payer • Tax period • Tax rate • Methodology for taxation (cumulative and non-cumulative) • Order and terms for tax paying (date, period, event, activity) Facultative elements • Tax preferences • Tax deduction • Tax Report (declaration) period • Tax receiver • Charges and penalties

  9. Tax preferences (benefits, favors) • Only legal • Non individual (cant be for a certain taxpayer) • Non discrimination • Good will (taxpayer can use or can refuse to use it) • No terms limitations

  10. Forms of tax benefits • Preferential tax regimes (special tax zones) • Tax – free for some kinds of taxpayers (fully or partly) • Tax immunity (for Royal families, religion institutes, arc and cultural organizations and so on) • Exemption (withdrawal of some share from tax base) • Tax deduction • Tax rebate • Tax payment delay • Tax credit • Tax break Also tax benefits can be national (State level), regional and municipal

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