An analysis on how corporations are affected by change and enforcement Dissertation

An analysis on how corporations are affected by change and enforcement of tax regulations - Dissertation Example 19 2.9 Tax Jurisdiction that Exempt Foreign –Source Income 21 2.10 Jurisdiction that Offer Tax Incentives to Qualified Holding Companies 21 2.11 Thin Capitalisation Rules 22 2.12 Do Taxes Impact Corporate Mergers? 23 2.13 Inverse Conversion by US Companies? 24 2.14 Corporate Tax Reforms in USA 25 2.15 Tax Planning – How G.E USA not Paid a Single Dollar In 2010 As Income-Tax? 27 2.16 Whether High Tax Rates compel the UK Companies to Relocate? 29 2.17 Why British Shipping Companies prefer Malta Registration? 30 2.18 Tax advantages for UK companies by Outsourcing to India 31 3 Findings 33 4 Recommendations 35 4 Conclusion 36 5 List of References 38 Tables: Table 1 Ease of Payment of Taxes 13 Table 2 Prevailing Corporate Taxes around the World 14 Graphs Graph 1 Perception of the Importance of the Climate Governments Create for Business Through Tax Policies or Financial Incentives 15 INTRODUCTION In modern era, the government of a nation assumes a significant role in develop ing the commercial, financial, general policies of the business concerns in the country and taxation policy is one of such mighty mechanisms of intervention. The privilege to tax domestic companies and to tax the every citizen of a nation is intrinsic in the sovereign command of every nation and its government. The taxation of business enterprises has become a chief avenue of revenue for the government due to constantly increasing burden of fiscal deficit in their budgets. The functions and duties of every government will include a provision of public health, public education, and the development of infrastructure facilities, provisions of multi services like old age pension, unemployment insurance and to cover these costs. Government is under obligation to tax both unincorporated and incorporated business sector. The reasons for confidence ushered on corporate sector for special tax treatment are mainly due to administrative convenience and political feasibility. Like individuals, business corporations do not exercise voting power in elections. Hence, government is more depending upon the corporate sector to raise additional revenues to a larger magnitude nowadays. (Tyagi and Kumar2003:390). To raise income, government levy charges or taxes on various activities, incomes, earnings of companies, individuals, etc. and this process is known as taxation. Taxation is of two type’s viz. direct taxation and indirect taxation. For instance, excise duties are known as indirect tax which is imposed on the manufacturing, production and import of merchandises like tobacco, alcohol, oil and gas and minerals. Illustrations of direct taxes are income-tax and property tax. (Tyagi and Kumar2003:390). The effect of taxation policies in business decision is more critical and viable as at a time when corporate taxation is contributing chiefly to the national exchequer. Day by day, the role of taxation policies in business decision is increasing, which increases its encumb rances. Higher corporate taxes may axe the corporate development and hamper the expansion of manufacturing capacity, hence, it becomes crucial to this research into the chief effects of corporate taxation policies on the business enterprises. (Tyagi and Kumar2003:390). The sudden spurt in corporate tax revenues in low-tax OECD nations may be due to the large scale of inflow of investment