Taxation is what? Objects of taxation

Each business entity in the implementation of operational activities is faced with tax practice. Therefore, for a successful business that does not contradict the current legislation, it is necessary to clearly understand not only the essence of this concept, but also to conduct a competent policy of fiscal planning. In the article below we will talk about the basics of this system and about some rules that must be adhered to literate entrepreneurs.

The essence of taxation

Very few people know that taxation is the oldest word, which literally means sacrifice, slave labor and even military trophies. From time immemorial, the state treasury was replenished in every possible way, by the way, not always humane. Every capable citizen was simply obliged to pay tribute to the government for the fact that he can earn bread for himself and his family in this territory.

But over time, the sense of justice in society grew, and the state came to understand more humane and regulated ways of replenishing its own treasury. Therefore, today taxes are not only a tribute and strengthening of the state budget, it is a conscious obligation of business entities. Therefore, almost every one of us understands why he pays money for the treasury.

Today, the object of taxation is any property, from the value of which an entrepreneur or any person receiving a profit is obliged to pay to the state. Despite the compulsory execution of payment, in the overwhelming majority of cases, this procedure is voluntary, which indicates a high level of legal awareness of modern citizens.

Principles of taxation

Taxation is a structured and state-regulated integrated system that operates within the framework of legislation. Thus, in the Russian Federation there are a number of principles that this economic institution meets:

1. The universality. This means that the treasury is obliged to replenish everything, both physical and legal persons, that meet the requirements of the Tax Code. There is no discriminatory nature of taxation by definition.
2. Equality. The tax burden is distributed according to the capabilities of each subject and is regulated through benefits.
3. Clarity. The legislation is interpreted in a consistent way, therefore each payer can find the information necessary for himself in the Tax Code of the Russian Federation.
4. Legality. The state provides for a number of reasons, on the basis of which, a person is obliged to pay a share of profits to the treasury.

Methods of taxation

Taxation is a process that is regulated by state policy simultaneously in several directions. One of these is the method of calculating the tax burden on business entities. The latter represents the dynamics of changes in fiscal rates, which may fluctuate depending on the change in the size of the budget base. In this aspect, taxes and taxation are a continuous process of regulating the volumes of the treasury. So, to fiscal methods it is possible to carry the following:

• Equal. This means that an identical burden is imposed on each business entity. At the moment, almost not used, because it is obsolete.
• Regressive. Typical is the reduction in the tax rate in accordance with the growth of the treasury base. It is often used if the level of the budget depends on a clearly defined amount, rather than on the income level of the population.
• Progressive. Acts back from regressive, actively used in the Russian Federation.
• Proportional. It is characterized by a firm rate and does not fluctuate depending on the dynamics of the level of income of business entities.

Types of taxes

The purpose of taxation is a regulated replenishment of the state treasury; therefore, in order to organize this process with the development of the sense of justice, the society faced all new types of fiscal charges that later were divided into subspecies. Among these we can distinguish the following:

1. By the method of payment: direct (proportional to the level of income) and indirect (expressed as a premium on the cost of goods that consumers cover). Also in practice, a simplified taxation system is used (this is a special regime for small business entities).
2. On the specifics of use: general (collected for financing national purposes), special (have a narrow focus of coverage - for example, when paying taxes on fuel, the funds fall into road funds).
3. At the place of distribution: state (paid to the centralized body of the fiscal service) and local (designed to cover the costs of intra-urban nature).

Functions of taxation

Taxation is a continuously operating mechanism that performs a number of functions:

1. Fiscal activity. It is the main one and consists in the process of regulating and forming the means of the state treasury for their further competent and even distribution relative to the needs on the ground.
2. Distribution activities. It is also called social, because it performs equalizing function between different layers of the population. In other words, part of the contributions of business entities to the budget is allocated to cover the costs of unprotected categories of society.
3. Regulatory activities. Maintains a balance between economic processes within the state, and also accumulates funds to fill financial gaps in a particular state sector.

The essence of the tax policy of the enterprise

For an entrepreneur, the object of taxation is his own earned profit, and therefore, as a rule, he does not particularly want to share it. In order to minimize costs and exclude the risks of violation of the law, it is important for the business entity to choose a competent tax policy. This set of measures must be followed during the implementation of operational activities.

At the formation the tax policy of the enterprise concerns following directions of activity of the subject of managing:

• To begin with, it is necessary to determine the feasible burden of the fiscal burden, and then - with the type of activity carried out;
• After that, it is necessary to determine the schedule and the term of payment of obligations to the budget, which will become as comfortable as possible for timely execution within the framework of the current legislation;
• In the last place, it is worth considering investment issues, as well as the methodology for distributing the company's net profit (not to be confused with a term such as profit before taxation - this is a slightly different concept, but more on this below).

Company's tax burden

The tax burden, or burden, as it is still called, is the ratio of the funds paid to the treasury of the enterprise by the business entity to the total mass of the revenue received during the reporting period. This is probably the most sensitive issue among entrepreneurs, since he does not care only for IP, who have the right to a simplified (patent) system of paying fiscal liabilities. Patent taxation is a special system that replaces a number of taxes (personal income tax, VAT, property obligations) and greatly simplifies the entrepreneur's operations.

As for other business entities, they should constantly monitor the tax burden ratio relative to revenue, cost of sales and the total value of assets involved in production. In the case of a significant share in the output, it is worth turning to the introduction of a more efficient tax policy in the enterprise.

How to create an effective tax strategy

Not every company needs measures to improve its tax strategy. Often, this procedure applies only to those business entities that pay to the state treasury more than a third of the value added to the products. Since in this case they not only lose a large share of net profit, but they also spend the resources of outdated funds every month. After all, profit before tax is not a dimensionless amount, and even it is peculiar to end at the most unexpected moment, especially with illiterate fiscal policy at the enterprise.

Therefore, it is important to objectively evaluate the policy conducted at the enterprise. And this means that it is necessary to determine the balance of involvement in the production of own funds, to assess the risks that are inconsistent with the current legislation, and to give a qualitative assessment of the implementation of the strategy in practice, because often not all of its items are observed.