Assessment of Impact of Items Reducing Tax Base and Tax on Total Amount of Corporate Income Tax in the Czech Republic in Selected Periods
Assessment of Impact of Items Reducing Tax Base and Tax on Total Amount of Corporate Income Tax in the Czech Republic in Selected Periods

Author(s): Karolina Lisztwanová, Iveta Ratmanová
Subject(s): Economic history, Economic policy, Transformation Period (1990 - 2010), Present Times (2010 - today), Fiscal Politics / Budgeting
Published by: Masarykova univerzita nakladatelství
Keywords: corporate income tax; tax base; tax savings; pyramidal decomposition; functional method;
Summary/Abstract: A tax policy as an important part of a fiscal policy influences many financial and operational decisions of enterprises. Regarding a corporate income tax, the aim of this paper is to state a value of tax savings with respect selected items reducing a tax base and with respect tax credits as items decreasing enterprises` a final tax liability. It means that attention is devoted the first of all to impact of tax losses, research and development expenses, expenses connected with donation activities of companies and investment incentives. As a source data are used data provided by Ministry of Finance of the Czech Republic connected with a selected period between years 2005 and 2015. We concentrate our attention not only on total summarized data but moreover on selected sectors. To be able to express and to compare changing of above-mentioned items, we firstly use base and chain indexes. Moreover, a method of a pyramidal decomposition of a top indicator i.e. the final tax liability is used, so that we could calculate and find out an impact of selected items on this value. In case of identified multiplicative relationship among individual items, a functional method is applied. Regarding results of our research, we may confirm that impact of above mentioned items changes in a selected period and especially in case of tax losses, we can identify a significant influence in determining of a final tax liability. Respecting research and development expenses, we may state that their impact grows up in observed period. When it comes investment incentives and donation activities development of these items is stable growing.

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