Taxation of Self-Employed in Russia: Potential Discrimination
- Autores: Ryabova E.1, Machekhin V.2
-
Afiliações:
- Lomonosov Moscow State University
- Financial University under the Government of the Russian Federation
- Edição: Volume 15, Nº 3 (2022)
- Páginas: 149-172
- Seção: Russian Law: Condition, Perspectives, Commentaries
- URL: https://journals.rcsi.science/2072-8166/article/view/318190
- DOI: https://doi.org/10.17323/2072-8166.2022.3.149.172
- ID: 318190
Citar
Texto integral
Resumo
In 2018 the Russian government introduced an option for the self-employed to pay a newly designed professional income tax instead of the ordinary personal income tax. This new tax regime has been widely examined by Russian scholars; however, the potentially discriminatory nature of the tax has not been studied. The tax is based on citizenship, and the authors’ principal hypothesis is that it conflicts with the fundamental principles of Russian tax law because it is not consistent with the principle of non-discrimination in Russian law. The article studies the issues arising from taxing the self-employed (i.e. the professional income tax) in a cross-border scenario and the potential for tax discrimination on grounds of nationality, tax nexus, and citizenship in taxing the self-employed in Russia. Moreover, the article raises the question of “general” tax discrimination among employees caused by the professional income tax. The authors use academic studies and judicial findings to examine the way other countries define the relationship between citizenship and taxation in order to clearly establish the discriminatory character of the professional income tax, and they conclude that the citizenship or nationality of the taxpayer is primarily a political connection rather than an economic one. The tax reflects an economic connection and should be understood as a payment for the “consumption” of public goods. In the contemporary understanding of taxation, the citizenship-based approach should be regarded as discriminatory in principle. The political ambitions of Russia in promoting integration across the EAEU cannot justify the restriction of the self-employed status only to citizens of EAEU member states. The authors recommend redesigning the professional income tax on the basis of residence and revising treaties pertaining to dual taxation in order to extend their provisions to the professional income tax.
Sobre autores
Elena Ryabova
Lomonosov Moscow State University
Autor responsável pela correspondência
Email: noreply@hse.ru
Associate Professor
Victor Machekhin
Financial University under the Government of the Russian Federation
Email: noreply@hse.ru
Associate Professor
Bibliografia
- Balkin S. (1989) Self-Employment for Low-Income People. New York: Praeger, 127 p.
- Beretta G. (2019) Citizenship and tax. World Tax Journal, vol. 11, no. 2.
- DOI:https://doi.org/10.59403/qwhyqs
- Borisova A. M. (2020) Financial and legal mechanism for encouraging small and medium businesses in Russian regions. Candidate of Juridical Sciences Thesis. Moscow, 28 p. (in Russ.)
- Bárány Z. (2017) Taxation and self-employment, LIS Working Papers. Available at:https://ideas.repec.org/p/lis/liswps/723.html(accessed: 20.05.2021)
- Freedman J., Chamberland E. (1997) Horizontal equity and the taxation of employed and self-employed workers. Fiscal Studies, vol. 18, pp. 87-118.
- DOI:https://doi.org/10.1111/j.1475-5890.1997.tb00255.x
- Fölster S. (2002) Do lower taxes stimulate self-employment? Small Business Economics, no. 19, pp. 135-145.
- DOI:https://doi.org/10.1023/A:1016200800982
- Goncharenko L. I., Advokatova A. S. (2020) Professional income tax: Risks and potential. Economics Taxes & Law, vol. 13, no. 5, pp. 131-140.
- DOI:https://doi.org/10.26794/1999-849X-2020-13-5-131-140
- Gurley-Calvez T. (2011) Will tax-based health insurance reforms help the self-employed stay in business? Contemporary Economic Policy, no. 29, pp. 441-460.
- DOI:https://doi.org/10.1111/j.1465-7287.2010.00202.x
- Hakim C. (1998) Social Change and Innovation in the Labor Market: Evidence from the Census SARs on Occupational Segregation and Labor Mobility, Part-Time Work and Student Jobs, Homework and Self-Employment. Oxford: University Press, 254 p.
- DOI:https://doi.org/10.1093/oso/9780198293811.001.0001
- Hennig C. et al. (2003) S corp taxation: Level the playing field. Tax Notes, no. 139, pp. 435-442.
- Huber G. (2015) Taxation without representation: The case of resident non-citizens. Bulletin for International Taxation, vol. 69, no. 10.
- DOI:https://doi.org/10.59403/1wszd55
- Joppke C. (2010) Citizenship and Immigration. Boston: Polity, 217 p.
- Kallergis A. (2021) Citizenship and taxation in France. European Taxation, vol. 55, no. 5, pp. 66-71.
- DOI:https://doi.org/10.59403/3jack8d
- Keatinge R. (2007) Self-employment tax issues in LLCs taxed as partnerships, Suffolk University Law School research paper No. 07-33.
- DOI:https://doi.org/10.2139/ssrn.984370
- Konobevtsev F.D. (2012) The regulation of informality in the Russian Federation. Candidate of Juridical Sciences Summary. Moscow, 26 p. (in Russ.)
- Le A. (1999) Empirical studies of self-employment. Journal of Economic Surveys, no. 13, pp. 381-416.
- DOI:https://doi.org/10.1111/1467-6419.00088
- Lyutova O.I. (2020) Electronic platform operators as participants of tax relations in the digital era (case of professional income tax). Pravoprimenenie=Law Enforcement Review, vol. 4, no. 4, pp. 56-67 (in Russ.)
- DOI:https://doi.org/10.24147/2542-1514.2020.4(4).56-67
- Mamasakhlisi N. M. (2018) Citizenship as an element of personal constitutional status in the Russian Federation. Candidate of Juridical Sciences Summary. Moscow, 27 p. (in Russ.)
- Mason R. and Knoll M. (2012) What is tax discrimination? Yale Law Journal, vol. 121, pp. 1014-1016.
- Mikhailov A. J. (2016) The impact of informal employment on the Russian labour market. Candidate of Juridical Sciences Summary. Moscow, 25 p. (in Russ.)
- Morris A. (1995) On the normative foundations of indirect discrimination law: Understanding the competing models of discrimination law as Aristotelian forms of justice. Oxford Journal of Legal Studies, vol. 15, no. 2, pp. 199-228.
- DOI:https://doi.org/10.1093/ojls/15.2.199
- Musgrave R. (2008) Public finance and three branch model. Journal of Economics and Finance, vol. 32, no. 4, pp. 334-339.
- DOI:https://doi.org/10.1007/s12197-008-9044-4
- Müller W. and Arum R. (eds.) (2004) The Reemergence of Self-Employment: A Comparative Study of Self-Employment Dynamics and Social Inequality, Princeton: Princeton University Press.
- Orgad L. (2011) The citizenship puzzle. American Journal of Comparative Law, vol. 59, no. 2, pp. 595-603.
- DOI:https://doi.org/10.1093/ajcl/59.2.594
- Panayi Ch. (2005) The Schempp case: EU citizenship, rights and taxes — A new leaf in ECJ jurisprudence or just a fig leaf. European Taxation, vol. 45, no. 11, pp. 482-487.
- Polhemus J. (2003) Employment and self-employment: Differences in determining earnings. Journal of Legal Economics, vol. 11, no. 3, pp. 87-95.
- Ponkratov V. V. et al. (2020) Comparative analysis of the main features of the professional income tax: Russian and foreign experience. In: Advances in Economics, Business and Management Research, vol. 128, pp. 2382-2386.
- DOI:https://doi.org/10.2991/aebmr.k.200312.330
- Ponomareva K.A. (2020) The fundamental freedoms and their influence on profit taxation in the EU and EAEU Pravo. Zhurnal Vysshey shkoly ekonomiki=Law. Journal of the Higher School of Economics, vol. 13, no. 3, pp. 185-206 (in Russ.)
- DOI:https://doi.org/10.17323/2072-8166.2020.3.185.206
- Rocen D. (1990) Employee/independent contractor issues. Journal of Corporate Accounting and Finance, no. 2, pp. 95-102.
- DOI:https://doi.org/10.1002/jcaf.3970020113
- Ros E. (2017) EU Citizenship and Direct Taxation. The Hague: Kluwer Law International, 318 p.
- Santiago B. (2009) Non-discrimination provisions at the intersection of EC and international tax law. European Taxation, vol. 49, no. 5.
- DOI:https://doi.org/10.59403/hybfrb
- Savitskiy A.I. (2019) Tax Discrimination and the Legal Regime of Non-discrimination. Candidate of Juridical Sciences Thesis. Ekaterinburg, 302 p. (in Russ.)
- Stenkula M. (2012) Taxation and entrepreneurship in a welfare state. Small Business Economics, no. 39, pp. 77-97.
- DOI:https://doi.org/10.1007/s11187-010-9296-1
- Stewart M. (2015) The tax state, benefit and legitimacy. Tax and Transfer working paper No. 1/2015.
- DOI:https://doi.org/10.2139/ssrn.2657294
- Tonge J. and Mycock A. (2010) Citizenship and political engagement among young people: The workings and findings of the Youth Citizenship Commission. Parliamentary Affairs, vol. 63, no. 1, pp. 182-200.
- DOI:https://doi.org/10.1093/pa/gsp049
Arquivos suplementares
