Indian Journal of Science and Technology

Abstract

Background: In the foreign practice, the consolidated taxation system is one of the ways to solve the problem of reducing the tax burden on business. Since 2013, a concept of a consolidated group of taxpayers (hereinafter CGT) has existed in the Russian taxation practice. Methods/Statistical analysis: As an experiment, we have used a method of polynomial interpolation, which takes into account the empirical tax base data obtained from the consolidated groups of taxpayers, located in the territory of the Russian Federation. The growth of the ratio of changes in the tax base of CGT located in the territories of eight territorial entities of the Russian Federation has showed multidirectional vectors of change in the value of their shares. When building a forecast based on the evaluation of positions of the tangent line inclination angles for the CGT tax base and for all the country’s companies, the growth coefficient was +0.8. Findings: We have proved the hypothesis of determining significance of the factor of a specific territorial entity of the Russian Federation for the structure of the tax base augmentation with respect to CGT and completely disproved the assumption of an insignificant impact of the regional factor. The determined tendency of reduction in the amount of the tax base when using CGT in some territorial entities of Russia is not indicative and decisive within the scope of the tax base formation regarding all taxpayers of the country. Differentiation is observed from the North-West Federal District in the amount of 0.1297 to the North Caucasus Federal District with the assumed value of the share of –0.14, indicating of the impact of socio-economic level of the regional development, regional support for the development of the respective business areas on the rate of CGT tax base formation, irrespective of the external economic factors. Since 2014, the creation of CGT and new members joining them has been suspended by the Russian Government and postponed until 01.01.2018. In this regard, a vector for further operation of the territorial entities of the Russian Federation to improve the current situation in a particular region of the country should be determined: the setting of reducing income tax rates, with regard to conditions determined by the tax legislation, and the use of special accounting procedure for losses of consolidated groups. Applications: The use of the polynomial interpolation makes it possible to examine the current procedure for CGT taxation in Russia, taking into account the impact of regional factors. Further development of the concept of consolidated taxation would solve the actual problems of the Russian tax policy, increasing tax revenues and fiscal capacity of all territorial entities.

Keywords: Consolidated Financial Statements, Corporate Income Tax, Financial Loss, Group of Companies, Interdependent Companies, State Budget, State Tax Policy, Tax Rates