ANALYSIS OF WORLD EXPERIENCE IN APPLYING METHODS OF CALCULATING TAX COSTS

Abstract

According to Council Directive 2011/85/EU "On requirements for budgetary frameworks of the Member States", EU Member States must publish detailed information on tax expenditures. Such reports help to improve fiscal planning and ensure fiscal transparency in the state by informing the public. Reports about tax expenditures allow to analyzing and identifying the best tools of government regulation that the government can use to achieve its goals. At present, reports on tax expenditures are not published on a regular basis in Ukraine. However, as the Ukraine aspires to EU membership, the issue of preparing such reports will become extremely important in the near future. Therefore, it is important to analyze the methods of calculating tax costs used in the world. The purpose of the article is to determine the features of the application of methods of calculating tax costs and their comparative analysis. The object of research is the process of calculating tax expenditures. In the process of research general scientific methods of cognition were used: analysis, synthesis, deduction, induction. Methods of calculating tax costs, which used in world practice (revenue forgone method, outlay equivalence method and the revenue gain method), was analyzed in the article. For each of the methods its main advantages and disadvantages were identified. The practice of applying these methods in foreign countries was considered. A comparative analysis of such methods was performed. The most common basic method for determining tax expenditure is the revenue forgone method. However, this method does not take into account the behavioral reactions of economic entities which will take place in the event of the abolition of tax preferences. Therefore, its application does not provide complete information on budget losses from the application of tax preferences. Recommendations for the choice of methods of calculating tax expenditures that should be used in Ukraine in the case of implementing the concept of tax expenditures were formed. Which methods of calculating tax expenditures and in which combinations should be used in Ukrainian realities was determined.