scholarly journals Debt reduction: Indicative factors in classification as a donation for income tax purposes

2017 ◽  
Vol 9 (2) ◽  
pp. 517-528
Author(s):  
Rudie Nel ◽  
Andrea Herron
Keyword(s):  
Income Tax ◽  
Economic Benefit ◽  
Taxable Income ◽  
Tax Arbitrage

Debt reduction in business is recognised for the economic relief afforded to the debtor involved. The new debt reduction regime was introduced in the Income Tax Act (section 19 and paragraph 12A of the Eighth Schedule) with the aim of minimising the tax impact so as not to negate the economic benefit. The new regime introduced an exclusion for debt reduced by way of a donation and uncertainty exists on instances where this exclusion would apply. This article considered four broad categories of factors indicative in the classification of a debt reduction as a donation (inadequate consideration; gratuitous waiver; intent and motive; classification as connected persons) and concluded with the formulation of such factors. The classification as connected persons is regarded as the most indicative of a debt reduction being classified as a donation, which could result in tax arbitrage if the creditor and debtor are taxed at different rates on the taxable income result of the debt reduction.

Zasady opodatkowania dochodów i obrotów ze sprzedaży produktów wytwarzanych w gospodarstwach rolnych

2021 ◽  
Vol 1 (69) ◽  
pp. 189-215
Author(s):  
Jacek Kulicki
Keyword(s):  
Income Tax ◽  
Value Added ◽  
Personal Income ◽  
Agricultural Activity ◽  
Personal Income Tax ◽  
Value Added Tax ◽  
Excise Tax ◽  
Agricultural Income

The analysis of the applicable regulations leads to the conclusion that the system of taxation of farmers’ income is complex. The author points out different definitions of agricultural activity for the purposes of income tax and value added tax. The legislator makes the classification of agricultural income among individual sources of income for the purposes of personal income tax dependent on whether they are processed or unprocessed products and on the method of their processing. The differences in the treatment of farmers’ revenues for the purposes of income tax overlap with the tax obligations with regard to value added tax and excise tax.

scholarly journals Michigan Oil and Gas Update

2021 ◽  
Vol 7 (3) ◽  
pp. 378-381
Author(s):  
William A. Horn ◽  
Joshua D. Beard
Keyword(s):  
Income Tax ◽  
Oil And Gas ◽  
Taxable Income

On March 23, 2020, the Michigan Court of Claims issued its opinion in Mannes v. Michigan Dep’t of Treasury. This case considered the meaning of the phrase “expenses of producing oil and gas” as such expenses relate to “taxable income” under the Michigan Income Tax Act of 1967.

scholarly journals Cloud computing activities: Guidelines on the South African income tax classification

2017 ◽  
Vol 9 (1) ◽  
pp. 228-243
Author(s):  
Shené Steenkamp ◽  
Rudie Nel
Keyword(s):  
Cloud Computing ◽  
South African ◽  
Income Tax ◽  
Computer Hardware ◽  
Correct Classification ◽  
The South ◽  
Know How ◽  
Cloud Computing Service ◽  
Source Test

The classification of income from cloud computing activities, according to the substance-over-form doctrine, is fundamental to the application of the correct taxation source test. The designation of IaaS, PaaS and SaaS, the three main cloud computing service models, clearly denotes the form of cloud computing activities as that of a service. However, the nature of cloud computing inherently raises the question of whether or not cloud computing income should not rather be classified as income from leasing activities or the imparting of know-how. In fact, the findings of this study suggest the classification would not necessarily always be that of a service. The possible classification as lease income can be either income from the lease of tangible computer hardware and/or of intellectual property (royalty income). The aim of this study was to formulate guidelines to assist in the correct classification of income from cloud computing activities. This was achieved by performing doctrinal research based on the South African and international literature.

scholarly journals Management Of Accrual Components In Response To Corporate Income Tax Rate Changes: Evidence From Korea

2013 ◽  
Vol 29 (5) ◽  
pp. 1421 ◽  
Author(s):  
Won-Wook Choi ◽  
Hyun-Ah Lee
Keyword(s):  
Financial Reporting ◽  
Income Tax ◽  
Tax Avoidance ◽  
Corporate Income Tax ◽  
Tax Rate ◽  
Taxable Income ◽  
Accruals Management ◽  
Accrual Management ◽  
Aggressive Tax Avoidance ◽  
Statutory Tax Rate

Changes in the statutory corporate income tax rate provide firms with an opportunity to reduce their tax burden by shifting their taxable income from higher to lower tax rate years. One negative consequence of shifting taxable income across years is higher variation in book income for financial reporting purposes. Taxable income and book income are closely related in most countries, and, in general, reporting volatile book income across years is not a favorable signal to investors. This study investigates how firms shift taxable income and concurrently mitigate book income fluctuation by managing accrual components separately when the statutory income tax rate changes. Unlike prior studies, we decompose discretionary accruals into two components and examine distinctive patterns of accrual management in Korea, where book-tax conformity is high and aggressive tax avoidance is restricted. We find that firms manage book-tax accruals for taxable income shifting and manage book-only accruals to mitigate book income fluctuation. Furthermore, we find the extent of book-tax and book-only accruals management varies depending on the firms tax and financial reporting costs. The results of this study provide clear and compelling evidence of firms opportunistic accrual management behavior in response to statutory tax rate reduction.

On the taxation of deposits and bonds and the need to qualify passive income

2021 ◽  
Vol 27 (4) ◽  
pp. 875-893
Author(s):  
Ol'ga S. BELOMYTTSEVA ◽  
Anna S. BALANDINA
Keyword(s):  
Comparative Analysis ◽  
Russian Federation ◽  
Income Tax ◽  
The State ◽  
Individual Investors ◽  
Personal Income Tax ◽  
Interest Income ◽  
State Classification ◽  
The Russian Federation

Subject. The article discusses the taxation of interest income from deposits and bonds in the Russian Federation from perspectives of individual investors and the State, classification of people’s income into active and passive. Objectives. We outline actions to adjust the fiscal policy on personal income tax to unify the taxation and stimulate the innovating activity of individuals. Methods. The study is based on methods of logic and comparative analysis. Results. Tactically, payers of interest income are now bound to inform taxpayers on accrued interest income, and the need to qualify coupons of government, municipal and corporate bonds for relief. The strategic result is determined as the need to qualify active and passive income. Conclusions and Relevance. The findings can be an agenda of the State Duma of the Russian Federation and promulgated in the Tax Code of the Russian Federation.

scholarly journals Harmonization of regulation in water territorial management becoming a fair economic benefit distribution towards regional autonomy

2018 ◽  
Vol 47 ◽  
pp. 06004 ◽  
Author(s):  
Tedi Sudrajat ◽  
Agus Raharjo ◽  
Rahadi Wasi Bintoro ◽  
Yusuf Saefudin
Keyword(s):  
Income Tax ◽  
Economic Benefit ◽  
Catchment Area ◽  
Regional Autonomy ◽  
Normative Approach ◽  
The Government ◽  
Marine Areas ◽  
The Comparative Study ◽  
Legal Harmonization ◽  
Practical Level

The extent of Indonesian territorial waters along with its natural wealth inside brings economic benefit, yet on the other side it invites problems. Especially with the existence of regional autonomy, the competition to obtain the economic benefit causes fiercer competition between regions. The competition causes the division emergence of marine areas which implicates towards the fate of fishermen. This relates to their catchment area, imposition of income tax, and technical restriction on fishing. This research used normative approach by emphasizing the comparative study of water territorial arrangement in various regions. Based on the research, in autonomy region which has marine water, they regulate the object very detail and there are some which exploit their area. The detailed and thorough regulation with its practice sometimes cause the territorial waters dispute among the regions. It causes a confusion for the government or fishermen in obtaining the economic benefit of their own water. Hence, in level of regulation, it needs a legal harmonization between autonomy regions in utilization of water territorial. In practical level it often needs coordination to create fair economic benefit for the stakeholders.

5. Income tax

2017 ◽  
Author(s):  
Kathryn Wright ◽  
Clare Firth ◽  
Lucy Crompton ◽  
Helen Fox ◽  
Frances Seabridge ◽  
...  
Keyword(s):  
Income Tax ◽  
Charitable Giving ◽  
Professional Training ◽  
Tax Law ◽  
Tax Rates ◽  
Taxable Income ◽  
Income Tax Law

Income tax is an essential part of a lawyer’s knowledge and professional training. Whilst it is not necessary to have knowledge to the extent that a specialist tax lawyer would have, it is necessary to have knowledge and understanding sufficient to recognise its implications as they arise and affect the client and ourselves. This chapter discusses sources of income tax law; collection and payment of income tax; rates of income tax and allowances; calculation of income tax; sources of taxable income; and charitable giving. This chapter covers all the changes introduced by the 2015 Budget.

scholarly journals Loss on „Toxic” Currency Options and Forward Contracts as a Tax-Deductible Expense in Corporate Income Tax – General Issues

2016 ◽  
Vol 1 (1) ◽  
pp. 11-22
Author(s):  
Łukasz Karczyński
Keyword(s):  
Financial Crisis ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Currency Options ◽  
Forward Contracts ◽  
Taxable Income ◽  
Legal Provisions ◽  
Administrative Courts ◽  
Legal Character ◽  
Proper Interpretation

Abstract Due to financial crisis many entrepreneurs suffered heavy losses on currency options and forward contracts. Tax authorities tend to disallow deduction of those losses from the taxable income. Many cases ended up in administrative courts, resulting in judicature controversies on the issue in question. This paper is the first of four in a cycle. The aim of the whole cycle will be to analyze deeply these controversies and suggest the proper interpretation of the legal provisions, determining whether losses on currency options and forward contracts should or should not be regarded as tax-deductible expenses. The aim of this paper is to determine the scope of the problems to solve as well as to analyze the legal character of the loss on non-deliverable currency options and forward contracts. Therefore this legal character has been determined in the light of Polish corporate income tax act. What is more, the problems with the interpretation of these losses as indirect deductible expenses have been solved.

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