The Problem of Double economic taxation of Distributed Profits and reform scenarios in russia
https://doi.org/10.26794/2587-5671-2022-26-5-207-219
Abstract
The article is devoted to the research of economic and tax distortions arising from double economic taxation of distributed profits in the form of dividends to participants–individuals.
The goal of the article is to develop approaches to the development of the Russian tax system. In order to achieve it, we summarize theoretical ideas of solving the problem and approaches of foreign countries. We also review the Russian context of taxation of dividends. The following features of Russian tax system are analyzed. First, distortion of tax regime in favor of debt financing of companies, and second, sufficiently competitive level of aggregate tax rate on distributed profits compared to developed countries. The presence of “debt bias” in the financing of Russian companies was revealed.
The different scenarios of reform of the Russian tax system are analyzed. The authors concluded that feasibility of transition to capital taxation with two elements: (1) partial exemption of dividends from taxation at the level of individual (recipient of profits) and (2) harmonization of the dividend tax regime with income tax regime from capital appreciation.
Keywords
tax policy,
profit distribution,
dividends,
double taxation,
notional interest deduction,
tax system
JEL: H21
Supporting agencies: The article was prepared within the framework of the research on the state assignment of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation. RANEPA, Moscow, Russia.
About the Authors
N. S. Milogolov
RANEPA; NIFI of the Ministry of Finance of the Russian Federation
Russian Federation
Competing Interests:
Russian Federation
Nikolai S. Milogolov — Сand. Sci. (Econ.), Head of the RANEPA Tax Policy Research Laboratory; Leading Researcher
Москва
Competing Interests:
The authors have no conflicts of interest to declare
A. B. Berberov
RANEPA
Russian Federation
Competing Interests:
Russian Federation
Azamat B. Berberov — Сand. Sci. (Econ.), Senior Research Fellow, Institute of Applied Economic Research
Москва
Competing Interests:
The authors have no conflicts of interest to declare
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For citations:
Milogolov N.S., Berberov A.B. The Problem of Double economic taxation of Distributed Profits and reform scenarios in russia. Finance: Theory and Practice. 2022;26(5):207-219. https://doi.org/10.26794/2587-5671-2022-26-5-207-219
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