№ 7/2023

Fìnansi Ukr. 2023 (7): 80–98https://doi.org/10.33763/finukr2023.07.080

TAX POLICY

IVANOV Yurij ¹

¹Research and Development Centre for Industrial Problems of Development of NAS of Ukraine
OrcID ID : https://orcid.org/0000-0002-5309-400X

Solidarity taxes: the latest EU experience and prospects for Ukraine

Introduction. The development of the taxation theory and the best practices of the World Anti-crisis Tax Policy prove the gradual separation of an independent and very specific group of taxes, called “solidarity taxes”, which are beginning to play a fairly significant role in modern tax policy. The intensive development of solidarity taxes and their implementation in the European fiscal space in 2022 are closely related to the crisis phenomena that have arisen in the field of energy prices and the associated increase in the inflation rate. This is one of the consequences of the military aggression of the Russian Federation against Ukraine. Another consequence of this war was the high need for investment necessary for the revival of Ukraine.
Problem Statement. The problems of the design of solidarity taxes and their scope of application, as well as the possibilities and features of their use as a promising source of investment financing, remain insufficiently studied. And the latest experience of the second half of 2022-early 2023 regarding the coordinated application of taxes on unpredictable profits in EU countries requires critical analysis and generalization.
Purpose. To study the economic content, evolution and regulatory framework of the application of solidarity taxes in the EU and the prospects for their implementation in Ukraine at the stage of post-war economic recovery.
Methods. The author used analytical and qualitative research methods, including logical and comparative analysis, to identify general and special features of solidarity taxes, decomposition and grouping methods to study the element base and identify models of the studied taxes.
Results. The theoretical basis and European practice of using solidarity taxes are analyzed, and the genesis of their development in the EU countries is studied. The principles of development and implementation of a common tax policy within the EU to counteract the consequences of the energy crisis through the introduction of a temporary contribution of solidarity, coping with unexpected profits in the energy sector and oil refining are considered. Attention is focused on the expediency, limitations and risks of the prospective application of solidarity taxes as its own source of investment financing at the stage of the post-war economic recovery of Ukraine.
Conclusions. Solidarity taxes implementation is a promising direction for creating our own national sources of investment financing in the context of the post-war economic recovery. The introduction of solidarity taxes in Ukraine requires the adaptation of the European methodology to the specifics of the set goals and conditions of taxation in Ukraine, as well as scientific justification of restrictions on the application of this tax and preventive mechanisms to counteract the negative consequences of its implementation.

Keywords:solidarity tax, windfall profit tax, income redistribution, post-war reconstruction of Ukraine

JEL: E62, E63, E64, H23, H30

Ivanov Y. . Solidarity taxes: the latest EU experience and prospects for Ukraine / Y. . Ivanov // Фінанси України. - 2023. - № 7. - C. 80-98.

Article original in Ukrainian (pp. 80 - 98)

Download

Downloads :57

1. United Nations. (2023, May 16). World Economic Situation and Prospects as of mid-2023 (Report). Retrieved from desapublications.un.org/publications/world-economic-situation-and-prospects-mid-20.
2. Kapur, S. (2019, January 4). Ocasio-Cortez Suggests 70% Ultra-Rich Tax Could Pay for Climate Plan. Bloomberg. Retrieved from www.bloomberg.com/news/articles/2019-01-04/ocasio-cortez-says-70-ultra-rich-tax-could-pay-for-climate-plan.
3. Lundberg, J. (2017). The Laffer curve for high incomes / Uppsala University Department of Economics. Working Paper, 9. Retrieved from www.econstor.eu/bitstream/10419/197646/1/1007192151.pdf.
4. Saez, E., Zucman, G., & Landais, C. (2020, April 3). A progressive European wealth tax to fund the European COVID response. Retrieved from cepr.org/voxeu/columns/progressive-european-wealth-tax-fund-european-covid-response.
5. Schwarcz, A. (2022, April 7). Solidarity and wealth tax. Retrieved from www.europarl.europa.eu/RegData/etudes/BRIE/2022/732005/IPOL_BRI(2022)732005_EN.pdf.
6. Szwed-Ziemichód, M. (2019, June 23). Solidarity Tax in Poland – New Tax For The Wealthiest From 2019. MSZtax. Retrieved from msztax.pl/en/solidarity-tax-in-poland.
7. Giles, C. (2021, April 7). IMF proposes ‘solidarity’ tax on pandemic winners and wealthy. Financial Times. Retrieved from www.ft.com/content/5dad2390-8a32-4908-8c96-6d23cd037c38.
8. Laje, D., & Faiola, A. (2021, February 19). Should the rich pay for the pandemic? Argentina thinks so. Other countries are taking a look. The Washington Post. Retrieved from www.washingtonpost.com/world/the_americas/coronarvirus-argentina-wealth-tax/2021/02/19/96fd1ec4-711b-11eb-93be-c10813e358a2_story.html.
9. Saez, E., & Piketty, T. (2013, October 24). Why the 1% should pay tax at 80%. The Guardian. Retrieved from www.theguardian.com/commentisfree/2013/oct/24/1percent-pay-tax-rate-80percent.
10. Committee of Experts on International Cooperation in Tax Matters. (2022, March 17). Twenty-fourth session. Wealth and Solidarity Taxes (Coordinator’s Report). Retrieved from www.un.org/development/desa/financing/sites/www.un.org.development.desa.financing/files/2022-03/CRP.14%20Wealth%20Taxes%20Report%20by%20the%20Coordinator_1.pdf
11. European Council. (2022, July 11). Eurogroup statement on fiscal policy orientations for 2023. Retrieved from -www.consilium.europa.eu/en/press/press-releases/2022/07/11/eurogroup-statement-on-fiscal-policy-orientations-for-2023/.
12. Solidarity tax. (n. d.). Business dictionary. Retrieved from web.archive.org/web/20140714235822/http://www.businessdictionary.com/definition/solidarity-tax.html.
13. Academic. (2012). Solidarity tax. Investments dictionary. Retrieved from web.archive.org/web/20140714175411/http://investment_terms.enacademic.com/13078/Solidarity_Tax.
14. Direction de l'information légale et administrative (Première ministre). (2023). Impôt sur la fortune immobilière (IFI) : personnes et biens concernés. Retrieved from www.service-public.fr/particuliers/vosdroits/F563.
15. WW+KN tax consultancy. (n. d.). Solidarity Surcharge (Solidaritaetszuschlag). Retrieved from wwkn.de/en/solidarity-surcharge-solidaritaetszuschlag/.
16. BDO Czech Republic. (2021). New Personal Income Taxes in 2022. Retrieved from www.bdo.cz/en-gb/news/2021/new-personal-income-taxes-in-2022.
17. Ministry of Finance of the Republic of Latvia. (2021, October 29). Solidarity tax. Retrieved from www.fm.gov.lv/en/solidarity-tax
18. PwC. (2018, July 20). New solidarity tax for the richest taxpayers and new social security contribution – practical impact overview. Retrieved from www.pwc.pl/en/articles/tax-news/2018/2018-07-20-new-solidarity-tax-and-new-social-security-contribution.html.
19. Ivanov, Yu. B. (2023). Solidarity taxes in the fiscal space of the EU: prospects and risks of implementation in Ukraine. In Actual economic, financial and legal issues in the conditions of European integration and global competition, pp. 317–322. Irpin: State Tax University [in Ukrainian].
20. PwC. (2023). Israel. Individuals. Other taxes. Retrieved from taxsummaries.pwc.com/israel/individual/other-taxes#:~:text=Luxury%20and%20excise%20taxes,certain%20yachts%20and%20luxury%20cars.
21. Morinobu, S. (2011, April 5). Financing Reconstruction with a Solidarity Tax. Retrieved from www.tokyofoundation.org/research/detail.php?id=189.
22. International Monetary Fund. (2021). Fiscal Monitor April 2021. Retrieved from www.imf.org/en/Publications/FM/Issues/2021/03/29/fiscal-monitor-april-2021.
23. EU Council. (2022, October 6). Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices. Retrieved from eur-lex.europa.eu/eli/reg/2022/1854/oj.
24. European Parliament, & EU Council. (2018, December 11). Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action. Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ%3AL%3A2018%3A328%3ATOC.
25. Rusu, R. (2023). Romania Applies 60% Solidarity Contribution on Fossil Fuel Sector. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2023-01-13_ro_2.html.
26. Národná Rada Slovenskej Respubliky. (2022, December 2). Vládny návrh zákona o solidárnom príspevku z činností v odvetviach ropy, zemného plynu, uhlia a rafinérií a o doplnení niektorých zákonov. Retrieved from www.nrsr.sk/web/Default.aspx?sid=zakony/zakon&MasterID=9029.
27. Yeroshenko, X. (2023). Parliament Approves Increase of Special Solidarity Contribution to 70%. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2023-03-27_sk_1.html.
28. Gallo, G. (2023). Budget Law for 2023: Italy Introduces New Windfall Tax on Energy Producers. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2023-01-18_it_3.html.
29. Gyöngyi, A. (2022). Hungary Modifies Windfall Profits Taxes. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2022-11-23_hu_1.html.
30. Finančné riaditeľstvo Slovenskej republiky. (2023). Informácia k plateniu odvodu z nadmerných príjmov (13/PO/2023/IM). Retrieved from www.financnasprava.sk/_img/pfsedit/Dokumenty_PFS/Zverejnovanie_dok/Aktualne/DP/DPPO/2023/2023.03.09_013_PO_2023_IM.pdf.
31. European Council. (2023, March 13). Eurogroup statement on the fiscal guidance for 2024. Retrieved from www.consilium.europa.eu/en/press/press-releases/2023/03/13/eurogroup-statement-on-the-fiscal-guidance-for-2024/
32. Krajcuska, F. (2022). Czech Republic Gazettes Windfall Tax, Increase in VAT Registration Threshold. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2022-12-02_cz_1.html.
33. Skatteverket. (2023, February 23). Skatt på övervinster från elproduktion. Retrieved from www.skatteverket.se/omoss/press/nyheter/2023/nyheter/skattpaovervinsterfranelproduktion.5.48cfd212185efbb440b2eab.html.
34. Perdelwitz, A. (2023). Federal Council Approves Increase of Contribution on Surplus Market Revenues of Electricity Producers. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2023-06-15_at_2.html.
35. Dafnomilis, V. (2022). Greece Releases Details of New Windfall Levy on Energy Companies' Profits. Retrieved from research.ibfd.org/#/doc?url=/data/tns/docs/html/tns_2022-09-09_gr_1.html.
36. Memorandum on economic and social policy dated March 23, 2023. (2023). Retrieved from bank.gov.ua/admin_uploads/article/Lol_MEFP_Ukraine_2023-03-24.pdf?v=4 [in Ukrainian].
37. Cabinet of Ministers of Ukraine. (2023). Regarding the Development of the National Revenue Strategy (Minutes No. 40, March 24) [in Ukrainian].