| Abstract [eng] |
Models of Taxation of Legal Persons This Master‘s thesis examines the models of taxation of legal persons (tax systems). The main purpose of company formation is profit-making, which is why corporate taxation is considered in the context of corporate tax. The tax burden on labor distinguishes between these tax systems for legal persons. First of all, there are two levels of taxation that exist in many countries that have opted for the classic tax system (including Lithuania). The company‘s initial taxation on profits is analyzed in detail, analyzing the main element of the tax: base, rate, applicable benefits and exemptions. Second-level taxation of dividends paid to shareholders is also analyzed. This model of taxation is often for generating double economic taxation, i.e. taxing the same income twice, Therefore, the link between corporation tax and personal income tax also deserves attention. In cases where a shareholder of a compnay is a legal person, it may benefit from certain advantages grabted by the legislator („participation exemption rule“, loss carry-forward, etc.). However, when a natural person pays dividends, personal income tax is levied on all dividens received, regardless of the numbuber os shares held, their retention, etc. The question therefore arises whether the shareholders of the company, i.e. natural and legal persons are taxed in the same way. As a result, fictitious, interdependent structures may be created with the primary objective of tax avoidance. Therefore, the thesis also analyzes the Institute of Corporate Taxation. It also distinguishes between the single-level taxation model, which is established in only few countries. The main difference between this model and the classical system is the period of tax liability, i.e. corporation tax is levied only on the profits distributed by the company. However, the question arise whether the difference in this model is not merely theoretical or whether the tax burden is lower than in countries with a classical tax system. In order to find out the main differences between these systems, the Estonian tax system is analyzed in detail, revealing the main elements of the tax, its advantages and disadvantages. |
