Home  Journals  International Accounting  32(326) - 2014 August

Economic entities' tax burden calculation methodology

Available online: 28 August 2014

Subject Heading: Taxes and taxation

JEL Classification: 

Pages: 41-51

Nowadays, the maximal exploitation of the taxation system's opportunities becomes even more important, specifically, for determining the perspective areas of a corporate tax policy improvement and substantiating the structural parameters of its functioning. Therefore, identifying the reserves to implement the tax policy targets, reviewing the essence, role and principles of tax planning, and developing approaches to tax optimization play a leading role. In this regard, the tax burden is one of the main drivers of the taxation system's efficient functioning. The tax burden reduction should be the priority area of the national tax policy at all levels of public administration. The main goal of business activity, namely, potential income maximization, determines the specific behavior of an economic entity. The economic entities seek to increase their revenues not only by perfecting their organization and management and introducing the latest technologies and equipment, but also by reducing the tax burden. The article focuses on the methodological support for tax burden calculation at the micro-level. The micro-level is a qualitative measuring instrument of a corporate tax policy, which considers the principles of complexity, comparability, accuracy and objectivity of the obtained results of economic entities' performance appraisal. The author's approach to tax burden calculation considers all tax payments where an economic entity acts as a taxpayer. In this case the indirect taxes, in particular, the VAT, must participate in part in the tax burden calculation as adjusted for demand and supply elasticity coefficient. The advantages of the presented approach are the objectivity of tax burden assessment as a result of using an indicator of newly created value and its accuracy, as this indicator enables to calculate a real tax burden of a taxpayer and to lower calculation errors.

Keywords: tax, burden, taxpayer, rate

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ISSN 2311-9381 (Online)
ISSN 2073-5081 (Print)

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