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Business and Economics > Corporate Taxation

You are looking at 1 - 5 of 5 items for :

  • Type: Journal Issue x
  • Azerbaijan, Republic of x
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Cover IMF Working Papers
Is There Money on the Table? Evidence on the Magnitude of Profit Shifting in the Extractive Industries
Sebastian Beer
Profit shifting remains a key concern in international tax system debate, but discussions are largely based on aggregate estimates, with less attention paid to individual sectors. Drawing on a novel dataset, we quantify tax avoidance risks in the extractive industries, a sector which is revenue critical for many developing economies. We find that a one percentage point increase in the domestic corporate tax rate has historically reduced sectoral profits by slightly over 3 percent; and the response tends to be more pronounced among mining than among hydrocarbon firms. There is only weak evidence transfer pricing rules contain tax minimization efforts of MNEs in our sample, but interest limitation rules (e.g., thin capitalization or earnings based rules) do reduce the observable extent of profit shifting. Our findings highlight the challenge of taxing income in the natural resource sector and suggest how fiscal regime design might be strengthened.
Keywords:
International Corporate Taxation; Multinational Firms; Mining; Petroleum; Profit Shifting; Debt; Interest Limitations; Transfer Pricing; Production Sharing Agreements; WP; tax rate differential; taxable profits; CIT base; profits increase; representative firm
Cover IMF Staff Country Reports
Republic of Azerbaijan: Selected Issues
International Monetary Fund
This Selected Issues paper on Azerbaijan highlights that rapid non-oil growth since the onset of the oil boom has contributed to substantial reduction in poverty and inequality. To keep growth inclusive, there is a need to accelerate economic diversification and make the nonhydrocarbon private sector a self-sustaining engine of growth. Policy priorities include strengthening governance and the business environment and improving human capital and productive infrastructure to enhance the productivity of private investment. Expanding the relatively well-targeted social safety net will ensure coverage of the vulnerable groups.
Keywords:
ISCR; CR; government; Azerbaijan; exchange rate; Azerbaijani authorities; government spending; indirect tax; customs revenue collection process; CIT rate; GDP growth; money supply; personal income; central bank; CIT revenue; Exchange rate arrangements; Corporate income tax; Oil prices; Central Asia; Global; Central and Eastern Europe; Eastern Europe; Europe
Cover IMF Working Papers
Current and Proposed Non-Oil Tax System in Azerbaijan
International Monetary Fund
This paper analyzes developments in non-oil tax policy, administration, and revenues in Azerbaijan, and suggests measures for further improvement. The main finding is that Azerbaijan's non-oil tax revenues increased significantly as a share of non-oil GDP in the last five years, but remain below potential. The non-oil tax revenue shortfall is mainly due to widespread exemptions, but there is scope for strengthening tax and customs administration. In the short term, expanding the tax base and better tax and customs administration will yield more revenues. In the medium term, more far-reaching reforms including reducing some direct tax rates, should be considered. The overall reform package could be made broadly revenue neutral by improving taxpayers' compliance and reducing exemptions.
Keywords:
WP; VAT; income tax; revenue; tax rate; direct tax
Cover IMF Working Papers
Zero Corporate Income Tax in Moldova: Tax Competition and Its Implications for Eastern Europe
Marcin Piatkowski
and
Mariusz Jarmuzek
Global economic integration intensified tax competition and raised concerns about the resulting "race to the bottom", which could undermine public investment and social spending. The aim of this paper is to test predictions that (i) there is interdependence in CIT rate setting in Eastern Europe and that (ii) the recent CIT cut in Moldova may intensify tax competition in the region. It finds that there is indeed evidence that during 1995-2006 countries in Eastern Europe strategically responded to changes in CIT rates in the region and that Moldovan zero CIT is likely to encourage further cuts in CIT. The paper also discusses implications of tax competition for Eastern Europe and finds that FDI flows will not be much affected, tax revenues are likely to decline, the shift in the composition in tax revenue may increase economic efficiency, but decrease equity. Tax coordination, while difficult politically, could help stem further decline in corporate taxation, but any gains might be modest and not certain to exceed the costs of tax coordination. Without tax coordination, however, it is unclear what exactly could stop corporate taxes from falling further.
Keywords:
WP; CIT rate; rate; tax rate; tax; tax revenue
Cover IMF Working Papers
Excess Wages Tax
Mr. S. Nuri Erbas
and
Mr. Alan A. Tait
Excess wages tax (EWT) is a tax-based incomes policy instrument introduced in many centrally-planned economies and still used in some FSU and Eastern European countries in transition. The main macroeconomic goal of EWT is to curb inflationary pressures by penalizing through taxation the “excessive” wage awards granted by enterprises in the course of wage and price liberalization. In this paper, effects of EWT on the behavior of a profit-maximizing enterprise under monopsony, its incidence on wages and profits, and its impact on inflation are analyzed. The effect of EWT on an enterprise that maximizes workers’ income is also examined with some observations on EWT’s impact on managerial behavior. Finally, recent experience with EWT is assessed and compared to that suggested by the model.
Keywords:
WP; minimum wage; wage bill; wage award; regulation scheme; monopsonist enterprise case; enterprise profits; wage growth; Wages; Minimum wages; Wage adjustments; Corporate income tax; Eastern Europe