Tax preferences: concept, types, who is supposed to

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Tax preferences are special benefits established by law. The exact definition of this term is not contained in any legislative act. And this fact greatly complicates the application of tax benefits and preferences in practice. There is a certain difference between these concepts.

Views

There are territorial, sectoral, targeted, functional, urgent, intravectoral tax preferences. Classify them based on their function.

Thus, the territorial type of tax preferences is aimed at supporting progress in a certain area and priority zone. For example, this concerns the allocation of a special economic zone, an offshore zone, and so on.

Sectoral tax preferences are aimed at stimulating various economic sectors. This may apply to space, aviation, education, and so on.

Term preferences are official support for taxpayers to minimize their debt. The main feature of this variety is that they are limited in duration. Therefore, such tax preferences are issued byonly the executive branch. These include tax payments, debt restructuring, installment plans, amnesties.

Targeted preferences are aimed at a certain category of taxpayers in order to support them. This group includes a simplified taxation system, social benefits, discounts, investment loans.

Intravector preferences function in relation to one tax. They are implemented through the division of rates, its regulation is carried out by law. These include a progressive, regressive taxation scale (the use of any of them depends on the policy pursued by the authorities), lowering the rate.

Functional preferences provide for the use of the opportunity to reduce tax liabilities. This includes funds used by business entities to reduce the burden of liabilities. That is, accelerated depreciation, loans, and so on.

General data

In order for the development of the economic component of the state to be successful, it is important to form an effective system of taxation. To achieve this goal, you need to think about many nuances. Tax preferences are an integral part of this system. They serve as a mechanism to reduce the burden on different categories of people. To do this, the most important point should be highlighted. Many people perceive tax incentives and preferences as one and the same. But this is a delusion.

When a benefit is used, it is always controlled by supervision. This is done by the tax authorities. Themmust be declared in reports, while tax preferences are not displayed in documents. They are needed to influence economic processes. They stimulate it, and sometimes slow it down. For example, there are tax incentives for small businesses to develop innovation and investment in various sectors of the economy. Often they are aimed at resolving social issues.

They should be seen as an opportunity for taxpayers to reduce the tax base. For example, sometimes 0% value added taxes are allocated for export procedures. To master this point, you need to read Art. 217 of the Tax Code of the Russian Federation, also read Art. 171. It notes that 0% is a mandatory practice.

Taxpayers do not have the right to choose whether or not to use this mechanism. 0% no exceptions. This provision is considered as a preference.

According to Balandin's wording, tax preferences are the allocation of certain benefits from the authorities for categories of taxpayers. This is expressed in the form of a reduction in mandatory payment amounts.

This implies a series of specific actions on the part of different categories of persons. For example, the capture of foreign markets. The definition of benefits is contained in the Tax Code of the Russian Federation. They are considered as a tool and as an element of taxation. The Tax Code of the Russian Federation notes that these benefits are provided to certain individuals and legal entities that have the right to do so in accordance with the law. This is expressed in a decrease in the amountsmandatory payments, which is important to do in favor of the state.

Tax incentives in Russia are also a tool for adjusting fiscal functions. It should be noted that in the Tax Code of the Russian Federation this concept is given without much clarity. For this reason, there is space to interpret it in one's own way. She is viewed differently. Here it is necessary to mention the words of Barulin that tax benefits are rights, obligations and ways to reduce the number of taxpayers' obligations.

Preferences in law

The most important provisions regarding taxation are contained in Art. 217 of the Tax Code of the Russian Federation. There are many primary documents adopted by the State Duma that regulate this moment. We need to pay attention to value added tax, income tax.

As an example of preferences, we can cite the fact that the organizers of the Olympic Games have certain benefits. This is the most striking example of tax preferences for sports organizations. The tax system currently includes two hundred benefits and preferences.

Income not subject to taxation

There are a number of incomes that are not subject to taxes. For example, income that is not subject to taxation includes prizes that athletes receive at games. This applies to all companies that participate in the organization of games. The list of such income is contained in Art. 217 of the Tax Code of the Russian Federation. Payments to religious associations, NGOs that provide services to the disabled are exempt from income tax. In the case of religious associations, income taxes are not withdrawnin cases where the profit is received by them for performing rituals.

Commercial tax credits

In a broad sense, there are two important aspects here. One of them is a simplified taxation system. We are talking about individual entrepreneurs, as well as legal entities with an annual turnover up to a certain milestone. Less taxes are taken from the income of these categories.

The second direction is employment in the technology park and other similar enterprises. In such cases, a tax regime is provided when the rate is reduced, in addition, bureaucratic relief is provided.

An important area in the work of the state is the assessment of the effectiveness of tax incentives. Regular proposals are formulated to improve this system. The estimates are currently based on the gross product in the region, taking into account the cumulative impact of taxes.

About tax holidays

STS (simplified taxation system) allows entrepreneurs to take advantage of tax holidays. However, this phenomenon does not apply to every IP. The thing is that holidays are shown only for the first time registered as an individual enterprise. Many are surprised that the country does not have the same procedure for an LLC. The thing is that the legislator did not find a way out of how to cope with the wholesale registration of new organizations.

Tax holidays are intended for those who were first registered as individual entrepreneurs, who are engaged in activities from the legal list, those who chosesimplified taxation system. Only the presence of all the above conditions leads to a zero interest rate.

It is important to note that article 56 of the Tax Code of the Russian Federation "Establishment and use of tax benefits" provides for the right of persons to refuse benefits at their discretion.

What are holidays? This is a period of total tax exemption. It applies only to those who have just started doing business. When it was announced that the legislator was considering this phenomenon, many expected the moment the law was introduced on purpose, in order to then register as an individual entrepreneur after its adoption.

Register an individual entrepreneur with a TIN that lasts for life. For this reason, it is not difficult to track down those who re-register in order to take advantage of the holidays again.

But there is nothing difficult to carry out the procedure for closing an enterprise, and then creating a new one with tax holidays, since the TIN of enterprises always changes. In this regard, the legislator has indicated many ways to deal with such a loophole. However, no such mechanism has been implemented so far.

And now only those who have passed the registration procedure for the first time rely on tax holidays. Moreover, they are not used for those who registered before the law went into effect.

Also, the legislation does not apply such a phenomenon throughout the country, but gives each region the right to introduce it at its discretion. No region sought to do this in order to continuereceive income from taxes on individual entrepreneurs. It was calculated that the shortfall in income due to such a benefit amounted to 250,000,000,000 rubles.

Given the size of the official budget, this is not such a large amount. But on the other hand, the holidays lead to the fact that the population opens a business more often, gets on its feet and contributes to the replenishment of the treasury. And as a result, more regions apply tax holidays.

This phenomenon applies only to a number of activities. The final decision on which areas the benefits apply to is also made by the region. It generates lists of OKVED codes related to the benefit. In addition, the legislation of the regions establishes other requirements for individual entrepreneurs on vacation.

Also, only those who have chosen the STS and PSN regimes receive benefits. They are not granted to imputed mode and BASIC.

Despite the fact that the validity of the legislation of the regions in this area is prescribed until 2020, the IP receives vacations for no more than two years. For the tax period is taken the year when the individual entrepreneur has passed the registration procedure. So, if the legislation in the region was introduced in 2016, then only individual entrepreneurs who registered after the entry into force of the relevant regulations can take advantage of the benefit, applying it until the end of the year and including the next year. Thus, the term is less than two years.

Worldwide

For a long time, the state has been developing areas of activity that are interesting to it, stimulating them or slowing them down with the introduction of preferences. For example, in the United States they use tax prolongation aimed at increasing investment. In Russia, the main task is not to reduce the burden of taxes. The priority task in the country is to influence a number of processes taking place in the country by introducing certain measures. It is important to stimulate the GDP, especially highlighting a number of industries. This is where tax incentives play an important role. They are intended for certain groups of taxpayers, where special calculation procedures apply.

There are a number of methods for introducing preferences. Among them, there is a deduction after the start of operation of objects, a deduction before operation. The first method is manifested in the deduction of the initial cost of objects of preferences in the first 3 tax periods of operation or simultaneously in the tax period in which the object began to function.

The second way is manifested in deducting the costs of construction, production, spending on improving buildings, equipment before they are used in the reporting period in which the costs are incurred.

Privileges are annulled at the moment they start to be used by reducing deductions in each reporting period, a multiple of the amount of preferences in which they were applied.

The objects of preferences, spending on reconstruction, improvement of buildings significant in production, equipment are taken into account separately from the installed assets over 3 reporting periods by taxpayers.

In the initial cost of objects of preferences, which are the main funds, include the costs that taxpayers bear until the momentstart using this object. This includes expenses for the purchase of objects, their formation, installation, and other expenses that increase their price.

Investment preferences are benefits that provide exemption from income taxes. Although tax incentives are considered some kind of relief from the state, in order to get them, you need a whole stack of documents. Initially, to receive them, it was necessary to conclude an agreement with the Investment Committee.

The state supports through investment tax preferences motives in the policy, which is aimed at the development of production.

Within the framework of the tax burden on enterprises doing business in special economic zones, special procedures for settlement with the budget are used.

Legal entities operating in special economic zones must meet a number of requirements. So, they must be registered as taxpayers at their location with the tax authorities in the special economic zone. They must also be members of the special economic zone in accordance with the law. They should not have structural subdivisions that are not located in the special economic zone. Legal entities - participants of the special economic zone - must have at least 70% of the income to be received from the sale of their goods and services.

About the current situation

In order to study this phenomenon in the Russian Federation, statistics were collected oninnovative activity. Thus, it was found that 62% of the participants are aware of the methods of supporting research development. Although the participants are well informed, in practice these methods are not very popular. Only one in four said they were affected by the use of tax incentives. This was noted by 30% of the participants. Among the main reasons that people have not experienced preferences, there are fuzzy instructions in accordance with which they receive preferences. Individual entrepreneurs also stated that there was no understanding of what kind of activity should be considered innovative. And a third of survey participants announced other reasons.

The results of these studies are in line with statements made by SMEs. Among the reasons why preferences are not used, exactly the same points as those indicated above are singled out. Representatives of these enterprises estimate the effectiveness of state activity at the level of 25%. The lowest efficiency was considered in the field of energy, and the highest - in the pharmaceutical sector, as well as in industrial production. This is probably due to the fact that some taxpayers find it more difficult to understand tax laws than others. The results of the research showed that there are some "problem areas" in the state policy in the field of innovation.

Factors

The main factor that will increase innovation activity is the effectiveness of government intervention in the tax sphere. There are 2 major trendsleading to greater attention to the effectiveness of preferences. For the same reasons, much attention is paid to the costs of stimulating innovation.

The first trend is manifested in the growth of the contribution of innovations to increase the competitiveness of states. The characteristic here is that the authorities understand the importance of raising support levels.

The second trend is the increasing complexity of scientific research. Resources are limited, there has been a tightening of requirements for their effectiveness.

In the Russian Federation, these two directions are expressed in tax documentation with programs. Their focus has changed. Initially, it stimulated economic growth in order to achieve the effectiveness of preferences, including enterprises that are engaged in innovation.

The main reason to support innovation is the presence of market failures, manifested in the fact that the return of organizations from investing in innovation remains incomplete. As a result, the mechanisms are intended to compensate innovative enterprises for lost profits, to stimulate the attraction of investments they need.

The results of the work are constantly evaluated. Many studies have been carried out, they are different, expressed in empirical conclusions. But given the limited information available, it's not easy to see the bottom line.

The main barrier to increasing the effectiveness of government support for many research projects is bureaucracy. The low efficiency of these mechanisms in the field of taxes is explained by many factors. So, they are not permanent, there are difficulties in managing some benefits and preferences. Moreover, they are manifested for both sides - for state bodies and for taxpayers. But the most negative factor is the unfavorable tax climate, which is a constraint on entrepreneurial activity. The potential of these mechanisms is not high, and benefits are not effective.

Conclusion

Given all the above information, it is easy to conclude that the functions of the authorities in the tax area are expressed in a large number of preferences they provide. But some do not work due to restrictions that exist in Russian realities, which leads to the fact that for enterprises the use of tax preferences is less profitable than operating without any preferences. An additional, rarely mentioned benefit is exemption from scheduled inspections.