2020-09-24
145
Eurobonds limiting derivatives tax accounting
exempt merge taxpayers
1. Two taxation options have been proposed for ___________ to be issued starting from 1 January 2014.
2. Option 1 would fully _________ the interest income of foreign companies that are actually entitled to such income and are not tax residents of offshore jurisdictions.
3. Plans call for reviewing the approach to ________ interest expenses and establishing specific thresholds. Moreover, income under the prescribed limit would not be subject to transfer pricing controls.
4. The Key Trends propose to _______ tax baskets for transactions with quoted securities, for quoted derivatives and for the result from main activity.
5. The document also spells out the possibility of merge baskets for transactions with non-quoted securities and ___________.
6. Plans also call for possibility to expand the number of __________ that can account for all transactions in one tax basket (currently only dealers are entitled to do so).
7. In order to simplify ___________, the document proposes justifying prices only for those transactions with securities and derivatives that are treated as controlled transactions under the new transfer pricing rules.
8.
Exercise 5. Text completion.
A) Read the article in which some headlines are missing. Discuss with a partner what headlines you would expect to find in each gap.
Tax policy
(1) __________________________
The Russian tax system includes federal, regional and local taxes. While federal taxes are payable in all Russian regions, regional and local taxes are applicable to companies registered or doing business in the relevant region and municipality.
(2) __________________________
The Russian tax system has undergone significant revision since 1999 when the Tax Code Part I was enacted. This law combines provisions relating to general tax principles, rights and obligations of taxpayers, tax authorities, and tax administration.
(3) __________________________
Later, since after 2001, the regulations on all taxes were revised and incorporated in the Tax Code Part II. Through this reform the tax administration became more transparent and predictable, and the number of taxes and the overall tax burden were reduced significantly.
(4) __________________________
The current income tax rates are particularly low, even in the international context, being 20 percent for companies and 13 percent for Russian tax resident individuals. Still, many aspects of the Russian tax system are subject to significant uncertainty. Further, the substantive provisions of Russian tax law and the interpretation and application of those provisions by the Russian tax authorities may be subject to more rapid and unpredictable change (possibly with retroactive effect) and inconsistency than in jurisdictions with more developed tax systems.
(5) __________________________
Over the past few years, the Tax Code was adopted to streamline tax administration and reduce tax burdens. Important revisions to corporate income tax (in Russian terminology “profit tax”) include reduction of the tax rate from 24 percent to 20 percent, introduction of thin capitalization rules and participation exemption rules for dividends, softening of depreciation rules, and extending deductions (including for interest expense) to make them adequate in the current financial crisis. In the area of VAT, positive changes include exemption for transactions with IP rights (except for trademarks) and certain types of R&D, extension of the tax period from a month to a quarter and the permission of offset for input VAT included in advance payments. Russian tax practice has been known for, in some cases, a contradictory and inadequately aggressive approach by tax authorities and inconsistent application of good-faith taxpayer criteria. The tax environment has improved remarkably since the Supreme Commercial Court confirmed taxpayers’ rights to optimize their tax burden and suggested the concept of a “justified tax benefit”.
B) Match these headlines (A-E) with the gaps in the article (1-5).
A Recent developments
B Great changes
C The problems of the tax law development
D New changes in the Tax Code
E Various types of taxes
Exercise 6.
Fill in the following prepositions where necessary.
on in (x2) from for
up with to
Projected reforms in personal taxation
The Key Trends propose equalizing taxation for three types of investment activity: investments (1) _______ securities, real estate transactions, and opening bank deposits. The document outlines four approaches that may help achieve this objective:
1) granting tax deductions on income derived (2) _______ sales of securities and units of unit investment funds within the prescribed limits;
2) change the limits on exempted interest accrued on bank deposits;
3) changing the approach (3) ______ granting benefits related to real estate sales (exempting the entire income amount if the individual taxpayer owned no more than three real properties at the date of sale);
4) introducing the concept of “individual investment account” in law and developing a procedure (4) _______ granting tax benefits for using such accounts.
Plans also call for introducing a property-related PIT deduction for housing purchases (5) ______ a maximum possible amount of RUB 3 million per taxpayer regardless of how many properties or property shares are acquired. Therefore, individuals will be entitled to claim property-related deductions with the tax authorities more than once in their lifetime (6) ______ until they reach the deduction threshold.
A real estate tax has been also introduced. It is based (7) ______ the cadastral value of the property. All regions of the Russian Federation will be subject to a real estate tax according to the cadastral value by 2020.
It is important to note that the 13% PIT rate will not change (8) _______ the foreseeable future.
Exercise 7. Word formation.
