Why did the Consolidated Taxpayer Group Regime Fail?
https://doi.org/10.26794/2587-5671-2022-26-3-252-270
Abstract
The object of the study is the consolidated taxpayer group regime (CTG) introduced in Russia in 2012 for the largest groups of companies in which a group of companies is treated as a single entity for tax purposes. The aim of this paper is to investigate the reasons for the decision to cancel the CTG regime starting from 2023. The method of the study is an analysis of the available official reports, scientific publications and officials’ statements on the topic. We have also compared the initial objectives of the CTG regime introduction with the criteria by which the regime was further evaluated. In the paper we show that the main reasons for criticizing and abolishing the CTG regime do not correspond to the initial goals of its introduction. In the result, we found that the reasons for criticism stem from the fact that the CTG mechanism does not always allow the Russian regions to achieve predictability of their budgets and prevent them from diminishing. In prospect, this experience should be taken into account when making the decision on the future of the CTG regime to avoid a disappointment of the ‘losing’ regions.
Keywords
consolidated taxpayer group regime (CTG),
corporate profits tax,
transfer pricing,
regional budgets,
budget federalism
JEL: H22, H25, H26
About the Authors
A. V. Korytin
Russian Presidential Academy of National Economy and Public Administration (RANEPA)
Russian Federation
Russian Federation
Andrey V. Korytin — Research Fellow, Laboratory for Tax Policy Studies.
Moscow
N. S. Kostrykina
Russian Presidential Academy of National Economy and Public Administration (RANEPA)
Russian Federation
Russian Federation
Natalya S. Kostrykina — Research Fellow, Laboratory for Tax Policy Studies.
Moscow
References
1. Migukina N. E. Foreign experience of state regulation of institute of the consolidated taxation within providing economic security. Voprosy ekonomiki i prava = Economic and Law Issues. 2015;(90):81–87. (In Russ.).
2. Cooper G. S. Policy forum: A few observations on managing the taxation of corporate groups — The Australian experience. Canadian Tax Journal / Revue Fiscale Canadienne. 2011;59(2):265–294.
3. Mintz J. Europe slowly lurches to a common consolidated corporate tax base: Issues at stake. In: Schön W., Schreiber U., Spengel C., eds. A common consolidated corporate tax base for Europe — Eine einheitliche Körperschaftsteuerbemessungsgrundlage für Europa. Berlin, Heidelberg: Springer-Verlag; 2008:128–138. DOI: 10.1007/978–3–540–79484–4_7
4. Khan Niazi S.U. Re-launch of the proposal for a Common Consolidated Corporate Tax Base (CCCTB) in the EU: A shift in paradigm. Legal Issues of Economic Integration. 2017;44(3):293–314.
5. Cavalier G. Harmonization of the corporate tax in the EU — The CCCTB Proposals (First part). Revue Internationale des Services Financiers/International Journal for Financial Services. 2017;(1):114–117. URL: https://hal-univ-lyon3.archives-ouvertes.fr/hal 01561193/document
6. Hentze T. The challenge of moving to a Common Consolidated Corporate Tax Base in the EU. Institut der deutschen Wirtschaft. IW-Report. 2019;(2). URL: https://www.econstor.eu/bitstre am/10419/191535/1/1047134152.pdf
7. Kireeva A.V. Prospects for the introduction of taxpayers’ consolidation institution in the Russian Federation. Ekonomiko-politicheskaya situatsiya v Rossii. 2008;(2):56–58. (In Russ.).
8. Vitvitskaya T.V. The advantages and disadvantages of introducing the institution of consolidated groups of taxpayers. Sotsial’no-ekonomicheskii i gumanitarnyi zhurnal Krasnoyarskogo GAU = Socio-Economic and Humanitarian Magazine Krasgau. 2015;(2):19–27. (In Russ.).
9. Bannova K.A., Dolgikh I.N., Kuz’mina N.A. Improving the methodology for distribution of regional tax revenues from consolidated taxpayers group based on added value. Finansy i kredit = Finance and Credit. 2016;(3):29–39. (In Russ.).
10. Kondratieva E.A., Shalneva M.S. Problems of development of the institution of the consolidated group of taxpayers in Russia: The risk of abuse for the purpose of tax evasion. Rassledovanie prestuplenii: problemy i puti ikh resheniya — Investigation of Crimes: Problems and Solution. 2016;(1):44–52. (In Russ.).
11. Kondrashova N. A. Prerequisites for creating consolidated groups of taxpayers. Mezhdunarodnyi bukhgalterskii uchet = International Accounting. 2013;(2):28–34. (In Russ.).
12. Gorbatenko E. O. Consequences of establishing consolidated group of taxpayers to regional budget revenues in example of Irkutsk area. EKO: vserossiiskii ekonomicheskii zhurnal = ECO Journal. 2015;(4):177–183. (In Russ.).
13. Evnevich M. A. Consolidated group of taxpayers as a holding-like institution. Vestnik SanktPeterburgskogo universiteta. Ekonomika = St Petersburg University Journal of Economic Studies (SUJES). 2013;(3):118–128. (In Russ.).
14. Babenko D.A. About development of foreign practice of application of the consolidated taxation concept. Transportnoe delo Rossii — Transport Business of Russia. 2014;(1):235–237. (In Russ.).
15. Babenko D.A. Introduction of the concept of the consolidated group of taxpayers in Russia: Preliminary results. Finansovyi zhurnal = Financial Journal. 2014;(2):135–142. (In Russ.).
16. Grinkevich L. S. Consolidated group of taxpayers as a tool for equitable distribution of tax revenues. Sibirskaya finansovaya shkola = Siberian Financial School. 2015;(2):40–44. (In Russ.).
17. Nikitin K.M., Avdienkova M.A., Zakharova O.O., Gilmanova E.A. Consolidated groups of taxpayers: How we should use the moratorium. Finansovyi zhurnal = Financial Journal. 2016;(5):37–51. (In Russ.).
18. Ilyin V.A., Povarova A.I. Consolidated taxation and its consequences for regional budgets. Ekonomika regiona = Economy of Region. 2019;15(1):70–83. (In Russ.). DOI: 10.17059/2019–1–6
19. Kizimov A.S., Shegurova T.A. Consolidated taxpayer institution: History of development and principles of functioning. Finansy i kredit = Finance and Credit. 2009;(30):11–16. (In Russ.).
20. Kostrykina N.S., Korytin A.V. Why did the consolidated tax regime cause massive losses in tax revenue in Russia? Journal of Tax Reform. 2020;6(1):6–21. DOI: 10.15826/jtr.2020.6.1.072
21. Malis N.I., Grundel L.P. The analysis of the consolidated taxpayer institution in Russia. Finansy i kredit = Finance and Credit. 2015;(3):38–46. (In Russ.).
22. Konovalova T.V. The results of functioning of the consolidated taxpayer groups in 2012–2015 on the example of Republic of Mari El. Innovatsionnoe razvitie ekonomiki = Innovative Development of Economy. 2016;(2):113–115. (In Russ.).
23. Leontieva J., Zaugarova E. Improvement of Russian consolidated groups of taxpayers taxation system. Zhurnal pravovykh i ekonomicheskikh issledovanii = Journal of Legal and Economic Studies. 2014;(2):109– 115. (In Russ.).
24. Shatalov S.D. On the main directions of tax policy at the present stage. Finansy = Finance. 2015;(5):3–7. (In Russ.).
25. Shu-Chien J.C. Neutrality as tax justice: The case of Common Consolidated Corporate Tax Base under the EU law. European Studies: The Review of European Law, Economics and Politics. 2018;5:33–66.
26. Mintz J. Corporate tax harmonization in Europe: It’s all about compliance. International Tax and Public Finance. 2004;11(2):221–234. DOI: 10.1023/B: ITAX.0000011401.67566.14
Review
For citations:
Korytin A.V., Kostrykina N.S. Why did the Consolidated Taxpayer Group Regime Fail? Finance: Theory and Practice. 2022;26(3):252-270. https://doi.org/10.26794/2587-5671-2022-26-3-252-270
Views:
780
Email this article 