Tax Regime: Organizational and Accounting Aspect

Abstract

The growth of business entities involves scaling up activities to gain a competitive advantage, which often requires a change in their taxpayer status. The study shows that operating under the general taxation system or on a simplified taxation system with value-added tax payer status leads not only to an increase in costs associated with accounting for tax compliance, but also to additional costs associated  with interaction with tax authorities, costs associated with the intensification of tax control and the payment of various kinds of informal payments, etc. The article examines accounting support for tax calculations as one of the key factors influencing the decision to choose a taxation status. It describes organizational and accounting tools identified across different taxation systems to determine directions for simplifying the accounting support for tax calculations of business entities, whose performance indicators are close to the threshold criteria for changing the tax status. The non-standard nature of the accounting process for determining tax liabilities for value added tax is identified (there is a need to perform regulated operations in the system of electronic administration of value added tax), which provides grounds for identifying the corresponding accounting and information subsystem, and therefore indicating that this tax is a source of additional costs for performing accounting tasks. To reduce the impact of the accounting factor when making a decision to change the tax status, the need to improve the accounting support of the value-added tax taxation mechanism has been identified, including simplification through digital solutions, through legislative changes regarding preferential taxation, and through the expansion of service-oriented functions of tax authorities, etc. To ensure interoperability between accounting and tax administration, the study proposes to develop an integrated information system based on the Income and Expense Accounting Book, improving its form by adding indicators that reflect value-added tax-related calculations.