...corporations pay taxes? Well they do. No matter if they are a mom and pop shop or a multinational corporation. The big question is how do companies that go international know what taxes they pay? Well your multinational companies do what we call treaty shopping to find out what taxes each country has that will affect the bottom line of the company. In this paper it will define international taxation, define treaty shopping, and define tax haven and what factors that a multinational company looks at that effect the placement of the company’s headquarters. In today’s society more and more corporations want to go international or become a multinational corporation, at the same time there is a growing concern on different tax laws of the different countries. To have a complete understanding of multinational taxation we must first define what international taxation. According to Wikipedia “International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country's tax laws. (Unknown, 2012)” The governments of the different countries make up the different tax laws base on if it is residential or commercial income. Some countries have a taxation system in place while other does not. The biggest is to know where to look for those taxations. In order for corporations that want to go international they must secondly do some research on the different countries taxes. In order to...
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...THE PURPOSES OF TAX The raising of the revenue is not the only purpose for which taxes are levied. The taxes are levied for various purposes as follows: a. Raising Revenue The main purpose of imposing taxes is to raise government income or revenue. Taxes are the major sources of government revenue. The government needs such revenue to maintain the peace and security in a country, to increase social welfare, to complete development projects like roads, schools, hospitals, power stations, etc. b. Economic Stability Taxes are also imposed to maintain economic stability in a country. In theory, during inflation, the government imposes more taxes in order to discourage the unnecessary expenditure of the individuals. On the other hand, during deflation, the taxes are reduced in order to encourage individuals to spend more money on goods and services. The increase and decrease in taxes helps to check the big fluctuations in the prices of goods and services and thus maintain the economic stability. c. Protection Policy Where a government has a policy of protecting some industries or commodities produced in a country, taxes may be imposed to implement such a policy. Heavy taxes are therefore imposed on commodities imported from other countries which compete with local commodities thus making them expensive. The consumers are therefore encouraged to buy the locally produced and low priced goods and services. d. Social Welfare Some commodities...
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...that give us humans a lot of utility. For oil producing countries, the prospects of exporting barrels of oil can be very exciting for fiscal revenues. The effect of oil production on fiscal revenues is largely due to the world oil price. In the last year and a half the price of oil has plummeted from $104/barrel to about $41/barrel today. This sharp decline in the price of oil has certainly hurt fiscal revenues of oil producing countries. It is also very likely that these countries do not enforce taxation. On the other hand, due to the volatile nature of oil prices, it is also rational to assume that oil-producing countries may enforce stringent tax codes. Stringent tax codes may be enforced to relieve budgetary pressures that may be as a result of lower oil prices. The purpose of this paper is to determine whether oil revenues have an effect on taxation. Understanding the effect of oil revenues on taxation is very important in terms of real world application. The information obtained from the analysis between the two variables will enable large producing oil nations to determine the kind of fiscal policy to undertake. It will help nations in planning budgets accordingly, while also helping governments determine whether there needs to be a change in tax rates to meet budgetary ambitions. For example, if there is negative effect between the oil revenues and taxation in a period where oil prices are low, a country may be inclined to increase tax rates. Literature Review ...
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...development and of political and social factors. Tax structure is affected by economic development in three ways: (a) tax base undergoes a change as the develop- ental process m proceeds; (b) change in the tax base brings about changes in the revenue system: and (c) economic development leads to changes in the objectives of tax policy. Bangladesh Government collects taxes on account of custom duty, sales tax, value added taxes, excise duty, cess, fees, fines, penalties, income tax, advalorem duty, etc. It appears that to fulfill the objectives of tax policy the Government every year brings some changes in various tax laws to collect more taxes on the basis of above tax structure. be established for those items to repair or servicing and thus to reduce the unemployment problems in the country. National Budget Every year before preparing National Budget the National Board of Revenue holds series of meetings with various trade bodies, trade associations, groups of people, various academic and professional Institutions. It seems that this year the discussions have been held on various scopes and opportunities of collecting more taxes. The discussions, of course, have been held in various dimensional scopes. In such a meeting organized by Management and Researches Development Initiative (MRDI) the Chairman of NBR opined on 25th April, 2010 that the Government was very much eager to promote Corporate Social Responsibility (CSR) through tax incentives but transparency and accountability of...
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...Asia-Pacific Development Journal Vol. 8, No. 1, June 2001 ISSUES IN TAX REFORMS Azizul Islam* This paper seeks to describe the principles that have guided recent tax reforms in Asian developing countries. It critically examines the purported rationale underlying these reforms and raises some issues connected with these reforms. The paper first discusses the new direction of the perceived role of taxation as a macroeconomic tool and the principles which have formed the basis of recent tax reforms. It then analyses the implications of the application of these principles for the level and structure of taxes. It concludes with a summary of the key issues raised in the paper. Developing countries implemented an array of major economic reforms during the 1980s and the 1990s. Tax reforms formed an integral part of these reforms. The impetus for tax reforms was provided by a number of domestic and external factors (ADB, 1993). The last two decades were marked by a fundamental reassessment in developing countries of the role of the Government in economic development. There was a discernible shift in favour of assigning a greater role to the private sector, including foreign enterprises. This required re-examination of the structure of tax systems. Faced with declining external assistance, many Governments came under pressure to reduce budgetary deficits in the interest of macroeconomic stability. Multilateral development agencies required deficit reduction as a precondition...
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...1. TAXATION The good professor finds three quantifiable reasons that may explain why taxes in Sweden are high, yet the incentives to be productive remain. The first is third-party verification of taxable income. There is a lot of that in Scandinavia, but even so Sweden remains an outlier. The second one only seems to apply to Denmark: It has a clean and transparent tax system, without many loopholes and deductions. This keeps people from sheltering their income. It also keeps high-income foreigners from coming to or staying in your country. (Native Danes, in contrast, seem to be quite attached to their homeland.) Third, the Scandinavian countries subsidize a lot of things that are complementary to work – such as education, child care, elder care and transportation – thereby compensating for their high taxes. Here again, they are outliers. Other Organization for Economic Cooperation and Development countries reach very similar participation rates with very low levels of such subsidies. Would those policies work in other countries? Perhaps. But perhaps they are all just manifestations of a highly productive public sector that the people like to put to use to do stuff. Furthermore, the high taxation caused a lot of issue. One of the issues is inadequate income, the total outcome of all of the effects listed below is a large tax burden. And only workers feel the brunt of this burden, because only workers create wealth. When all of these effects are combined, the tax burden on the...
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...Value-Added Tax Introduction Americans seem to fear taxes, but consistently complain about the economic instability of this country. A great deal of Americans does not even understand how to calculate the collection of, or expenditures of the percentage of taxes they pay on an annual basis. Other countries have adopted the value-added tax and are not in a massive hole of debt such as the United States. Is there value to the value-added tax? As history has indicated for hundreds of years, taxes are required for a country to face economic growth and to become prosperous. The income tax plan that is currently in place is not helping the United States economy in the least especially compared to our expenditures. But exactly which tax method would be of greatest value for the United States’ to begin the slow hike uphill to conquer the massive hole of debt. Is the income tax or consumption based tax best for Americans? This research paper may not answer the United States economic problems, but will define the various taxes and how they may benefit American’s current economic instability. Literature Review Mr. James R. White is the Director of Strategic Issues within the United States Government Accountability Office. The following article was in his testimony before the Committee on Ways and Means, House of Representatives, “Value-Added Taxes: Potential Lessons for the United States from Other Countries’ Experiences.” (White, 2011) Mr. White defined value-added...
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...should be highlighted the following aspects: 1. Abolish agricultural taxes taxes, the tax burden on farmers into the main tax system. Lower taxes, reduce the tax burden on farmers. Can be considered in bringing agricultural products into value-added tax system, tax, agricultural value-added tax should be set at 10%. In other taxes, there are also all the necessary tax concessions given to the farmers. 3. The agricultural tax in the form of money from a material change. China's current agricultural tax system is the formation of the initial founding of New China, and its impact on national control grain resources, stability, economic relations between urban and rural areas, increasing the state's financial revenues and ensure the supply of agricultural products and so the city has played an active role. However, with the economic Development caused by changes in socio-economic relations, especially in the establishment of a socialist market economy, the overall institutional arrangements and accession to the World Trade Organization trend, the current agricultural tax system is not adaptive and even disadvantages become more prominent, need for reform. Agriculture, tax reform, to fundamentally reduce the burden on peasants and the elimination of urban-rural dual Structure is also very necessary and important. 1, the existing system of agricultural product main problems 1. Agricultural property taxes blurred, in the areas of taxation can not be scientific. China's...
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...EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
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...Conclusion…………………………………………………………………………………………………………………………………………....11 References…………………………………………………………………………………………………………………………………………….14 Easa Faheem S11422649 Bachelors Degree in Human Resource Management 1 Subject code: BBEK1103 Subject: Principles of Microeconomics Preface This is a work done as part of the module „Principles of Microeconomics‟, which is part of the course Bachelor of Human Resource Management. Consisting of an analysis of a Tax reforms for Maldives, this assignment evaluates the purpose of the tax system, types of tax systems, effects of the tax reform systems to the economy and other factors which affect it. The objective of this work is to develop students‟ ability to analyse the critically tax reform systems of certain country, as well as the various external factors that have an impact on the economy and other aspects. The assignment begins with a general preface followed by the various components of analysis with a bibliography at the end. Easa Faheem S11422649 Bachelors Degree in Human Resource Management 2 Subject code: BBEK1103 Subject: Principles of Microeconomics Introduction Until, 2nd October 2011, revenue of government of republic of Maldives is depending...
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...Tax Accounting The first step to understanding taxes is to first understand why we have taxes in the first place. As citizens many people take for granted what benefits we gain from the government developing the country around us. The various infrastructures, public systems, education, and the very safety of the citizens in a country are all affected by government funds. People generally are unable to pay for these services directly out of their own pockets, so the government provides for the care of its citizens out of its own funds. As most people know, the United States tax system is special in that citizens generally can pay taxes to a variety of levels: federal, state, and even city taxes depending on where you live. Regardless of whom you pay taxes to, or if you live in the United States or in some other country around the world, the objective of income taxes still remains the same. Just as was mentioned in the previous paragraph, taxes are used to fund various government activities that affect the citizens of a country throughout their everyday life. Income taxes provide a way to ensure that the government is able to collect revenue from its citizens efforts at a variety of governmental levels to provide proper care and service for its people and keep the country running. After understanding why taxes are important, another important aspect to understand is how tax accounting differs from Generally Accepted...
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...996 | 0.847 | Germany | 2.093 | 0.887 | Italy | 2.329 | 0.936 | Spain | 1.878 | 0.932 | Great Britain | 2.158 | 0.830 | Japan | 1.641 | 0.972 | USA | 0.921 | 0.809 | Source: AIE a) Comment on the weight of taxes on total fuel prices in these countries Share of the taxes on fuel prices There is substantial variation. Generally, in countries that are members of the European Union, the tax is an average of 57.4% of the price, while in Japan it is around 40%, and in the US it is the lowest. Clearly in most of these countries, fuel prices are heavily determined by taxes b) What could be the reasons for these taxes? The big gap between the European countries and Japan relative to the US in terms of fuel price taxation is linked to the fact that these countries are net importers of fuel. As a consequence, the governments incur in a deficit, as they are in charge of importing oil and gas. The high tax on fuel prices contributes to making up for that deficit. In parallel, the fuel taxes can help discourage the use of fuel cars so as to foster the use of cars that are based on cleaner energies. c) Can they be effective, given that oil consumption is difficult to reduce? Regarding the aim of taxes to discourage the use of oil and gas, yes, they can be if there are other incentives/benefits to switch to cleaner cars and if cleaner cars are easily...
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...UNIT I NATIONAL INCOME AND MACROECONOMICS 1 National Income National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income. Alfred Marshall in his ‘Principle of Economics’ (1949) defines National income as “The labour and capital of a country, acting on its natural resources, produce annually a certain net aggregate of commodities, material and immaterial, including services of all kinds…..and net income due on account of foreign investments must be added in. This is the true net National income or Revenue of the country or the national dividend.” Irving Fisher defined national income as “The national dividend or income consists solely of services as received by the ultimate consumers, whether from their material or from human environments. Thus, a piano or an overcoat made for me this year is not a part of this year’s income, but an addition to capital. Only the services rendered to me during this year by these things are income.” Central Statistical Organization defines National income as “National Income is the sum of factor income earned by the normal residents of a country in the form of wages, rent, interest and profit in an accounting year.” Concepts of National Income There are different concepts of National Income, namely; GNP...
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...EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
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...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
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