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Optimization of Corporate Profit Taxation in the Context of Stimulating Their Investment Activity: The Case of Ukraine

Author

Listed:
  • Lesia Tkachyk
  • Mariya Rubakha
  • Nataliia Ilkiv

Abstract

The article describes various methods of tax optimization in the implementation of corporate tax management of a business entity, in particular mechanisms for reducing the tax base, using tax breaks, and a special tax regime, changing the place of registration of taxpayers.The methodology of economic and mathematical modelling was used to optimize the tax burden of a business entity by balancing between the part of corporate income tax (investment tax credit), that an enterprise should use for investing, and the part paid to the budget.The developed economic-mathematical model of determining the proportion of «investment tax credit» entity has two objective functions – maximum value of the entity's profit and maximum of the accrued taxes sum. The offered economic-mathematical model will allow to define effective strategies of management of enterprise's profit and demonstrate advantages of preferential taxation for activation of investment activity of the enterprise.

Suggested Citation

  • Lesia Tkachyk & Mariya Rubakha & Nataliia Ilkiv, 2020. "Optimization of Corporate Profit Taxation in the Context of Stimulating Their Investment Activity: The Case of Ukraine," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 28-51.
    • Handle: RePEc:bas:econst:y:2020:i:4:p:28-51
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    File URL: https://www.iki.bas.bg/Journals/EconomicStudies/2020/2020-4/2_Rubakha-Mariya_f-f.pdf
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    References listed on IDEAS

    as
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    5. Gilbert E. Metcalf & Don Fullerton, 2002. "The Distribution of Tax Burdens: An Introduction," NBER Working Papers 8978, National Bureau of Economic Research, Inc.
    6. Kathleen Powers & John R. Robinson & Bridget Stomberg, 2016. "How do CEO incentives affect corporate tax planning and financial reporting of income taxes?," Review of Accounting Studies, Springer, vol. 21(2), pages 672-710, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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