Journal of Applied Economic Research
ISSN 2712-7435
Fiscal Implications of a Complete Conversion to Taxation of Property of Organizations in Russia on the Basis of Cadastral Value
Milyausha R. Pinskaya 1,2, Rodion V. Balakin 1,3
1 Financial Research Institute of the Ministry of Finance of the Russian Federation, Moscow, Russia
2 Financial University under the Government of the Russian Federation, Moscow, Russia
3 Lobachevsky State University of Nizhniy Novgorod, Nizhny Novgorod, Russia
Abstract
The study is focused on estimating the fiscal implications of conversion to taxation of corporate property on the basis of cadastral value. The relevance of the work is determined by the importance of forming a stable tax base for property tax in the context of the conversion to taxation based on the cadastral value of the corporate property tax. The purpose of the study is to estimate the implications of a complete conversion to the use of cadastral value as the only source of formation of the tax base for corporate property tax. The study aggregates information from the state dataset «Data on cadastral value of real estate properties by territorial affiliation» of Rosreestr (The Federal Service for State Registration, Cadastre and Cartography). The research procedure consists in the fact that, based on the processing of this information, the total cadastral value and the number of capital construction properties in the regions of the Russian Federation are characterized. At the same time, the hypothesis of the research is that a complete conversion to taxation of corporate property on the basis of cadastral value results in the growth of tax revenue from corporate property tax. The characteristics of the monetary and numerical parameters of such a potential tax base are given and the implications of a complete conversion to the taxation of corporate property on the basis of cadastral value are estimated. The resulting estimate is compared with actual revenues, and a conclusion is made about the positive effect of a full conversion to the use of cadastral value as the tax base for corporate property tax. The theoretical relevance consists in the fact that the possibility of the direct use of data of the state dataset for formation of information on the tax base on corporate property tax is critically analyzed. The practical relevance is determined by the calculation of the potential growth of corporate property tax revenues in connection with the full conversion to the calculation of the tax base only on the basis of cadastral value as per the Rosreestr dataset.
Keywords
corporate property tax; tax base; cadastral value; capital construction objects; estimation of tax revenue potential.
JEL classification
Н20References
1. Ahmed-Skrzypek, S., Wołowiec, T. (2021). The concept of real estate taxation based on the ad valorem principle. International Journal of Legal Studies, Vol. 9, Issue 1, 225–249. https://doi.org/10.5604/01.3001.0015.0437
2. Fritzsche, С., Vandrei, L. (2019). The German real estate transfer tax: Evidence for single-family home transactions. Regional Science and Urban Economics, Vol. 74, 131–143. https://doi.org/10.1016/j.regsciurbeco.2018.08.005
3. Norregaard, J. (2013). Taxing Immovable Property Revenue Potential and Implementation Challenges. IMF Working Papers, WP/13/129. International Monetary Fund, 42 p. https://doi.org/10.5089/9781484369050.001.A001
4. Cashin, S.M., McGrath, G. (2006). Establishing a modern cadastral system within a transition country: Consequences for the Republic of Moldova. Land Use Policy, Vol. 23, Issue 4, 629–642. https://doi.org/10.1016/j.landusepol.2005.05.009
5. Polny, L. (2014). Prediction cadastral tax implementation in the aspect of experience other countries. Geomatics and Environmental Engineering, Vol. 8, No. 4, 43–53. http://dx.doi.org/10.7494/geom.2014.8.4.43
6. Hełdak, M., Stacherzak, A., Baumane, V. (2014). Real estate value tax based on the Latvian experience. Real Estate Management and Valuation, Vol. 22, Issue 4, 60–67. http://dx.doi.org/10.2478/remav-2014-0037
7. Bykova E., Hełdak, M., Sishchuk J. (2020). Cadastral land value modelling based on zoning by prestige: a case study of a resort town. Sustainability, Vol. 12, Issue 19, 7904. https://doi.org/10.3390/su12197904
8. Christl, M., Köppl-Turyna, M., Lorenz, H., Kucsera, D. (2020). Redistribution within the tax-benefits system in Austria. Economic Analysis and Policy, Vol. 68, 250–264. https://doi.org/10.1016/j.eap.2020.09.011
9. Kharakoz, Y. (2020). Educational aspects of studies of cadastral value’s influence of property taxation and accounting. Proceedings of ADVED 2020: 6th International Conference on Advances in Education. International Organization Center Of Academic Research, 176–181. https://doi.org/10.47696/adved.202094
10. Bradbury, K., Ladd, H. (1987). City taxes and property tax bases. National Tax Journal, Vol. 41, No. 4, 503–523. https://doi.org/10.1086/NTJ41788756
11. Volovich, N.V., Kovalev, D.V. (2021). Issues of disputing the results of determining the cadastral value of real estate objects. Part 1. Methodology. Property Relations in the Russian Federation, No. 2, 53–64. (In Russ.). https://doi.org/10.24411/2072-4098-2021-10203
12. OECD (2021). Making property tax reform happen in China: a review of property tax design and reform experiences in OECD countries. OECD Fiscal Federalism Studies. https://doi.org/10.1787/bd0fbae3-en
13. Stucere, S., Mazure, G. (2022). Assessment of factors affecting the amount of immovable property tax in Latvia. Regional Formation and Development Studies, Vol. 7, Issue 2. 142–152. https://doi.org/10.15181/rfds.v7i2.2354
14. Sutyagin, V.Yu., Bespalov, M.V. (2018). Сurrent problems of cadastral valuation reliability. Accounting. Analysis. Auditing, Vol. 5, No. 6, 73–80. (In Russ.). https://doi.org/10.26794/2408-9303-2018-5-6-73-80
15. Sutyagin, V.Yu., Radyukova, Y.Yu., Smagina, V.V., Sinitsyna, A.A., Pahomov, N.N. (2020). Challenging the cadastral valuation of a capital construction facility: land accounting. European Proceedings of Social and Behavioural Sciences, Vol. 92, 3401–3409. https://doi.org/10.15405/epsbs.2020.10.05.452
16. Lykova, L.N. (2018). Regional Component of Tax Policy: Ways to Support Economic Growth. Problems of Territory's Development, No. 2, 71–86. https://doi.org/10.15838/ptd/2018.2.94.5
17. Franzsen, R. (2022). Should market value be retained as the only tax base for municipal property rates in South Africa? Potchefstroom Electronic Law Journal, Vol. 25, No. 1, 1–28. https://doi.org/10.17159/1727-3781/2022/v25i0a14061
18. Gubanishcheva, M.A. (2020). Research of foreign experience in determining the tax base: prospects for cadastral valuation in Russia. Vestnik NSUEM, No. 1, 127–138. (In Russ.). https://doi.org/10.34020/2073-6495-2020-1-127-138
19. Gubanishcheva, M., Sementsov, N. (2023). The use of the effective age in the calculation of the cadastral value as a factor in the sustainable development of the region. E3S Web of Conferences, Vol. 376, 05024. https://doi.org/10.1051/e3sconf/202337605024
20. Gubanishcheva, M., Sementsov, N. (2023). Methodological tools for calculating the cadastral value based on the corrected effective age of the capital construction object. E3S Web of Conferences, Vol. 376, 06007. https://doi.org/10.1051/e3sconf/202337106007
21. Sheptiy, A.V. (2020). Cadastral value as the basis of property taxes. Ural Journal of Legal Research, No. 5, 89–99. (In Russ.). https://doi.org/10.34076/2658-512X-2020-5-89-99
22. Lapshina, А.S. (2015). Comparative analysis of approaches to determining the property tax based on the cadastral and market value of real estate. Journal of Economic Regulation, Vol. 6, No. 3, 128–137. (In Russ.). https://doi.org/10.17835/2078-5429.2015.6.3.128-137
23. Unel, F.B., Yalpir, S. (2023). Sustainable tax system design for use of mass real estate appraisal in land management. Land Use Policy, Vol. 131, 106734. https://doi.org/10.1016/j.landusepol.2023.106734
24. Ullah, F., Sepasgozar, S.M.E., Thaheem, M.J., Al-Turjman, F. (2021). Barriers to the digitalisation and innovation of Australian Smart Real Estate: A managerial perspective on the technology non-adoption. Environmental Technology & Innovation, Vol. 22, 101527. https://doi.org/10.1016/j.eti.2021.101527
25. Aguzarova, L., Aguzarova, F. (2022). On the issue of cadastral value and its impact on property taxation in the Russian Federation. Business 4.0 as a Subject of the Digital Economy. Advances in Science, Technology & Innovation. Edited by E.G. Popkova. Springer, 595–599. https://doi.org/10.1007/978-3-030-90324-4_95
26. Krigsholm, P., Riekkinen, K., Ståhle, P. (2020). Pathways for a future cadastral system: A socio-technical approach. Land Use Policy, Vol. 94, 104504. https://doi.org/10.1016/j.landusepol.2020.104504
27. Kopyściańska, K. (2016). Cadastral tax in the context of the constitutional principle of tax justice. Oeconomia, Vol. 50, No. 1, 381–390. https://doi.org/10.17951/h.2016.50.1.381
28. Hajji, R., El Asri, H., Ez-Zriouli, C. (2023). Upgrading to 3D cadastre in Morocco: Lessons learned from benchmarking of international 3D cadastral systems. Land Use Policy, Vol. 128, 106605. https://doi.org/10.1016/j.landusepol.2023.106605
29. Sternik, S., Gareev, I., Akhmetgaliev, T. (2021). Digital tools for determining the cadastral valuation for the sustainable development of the region. SHS Web of Conferences, Vol. 106, 01012. https://doi.org/10.1051/shsconf/202110601012
30. Sinenko, O.A., Domnikov, A.Yu. (2022). Property taxation of companies in territories with a special economic status. Financial Journal, Vol. 14, No. 3, 74–85. (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-74-85
31. Alekhin, B.I. (2020). Regional tax autonomy and budget balances. Financial Journal, 2020. Vol. 12, No. 5, 114–127. (In Russ.). https://doi.org/10.31107/2075-1990-2020-5-114-127
32. Arlashkin, I.Yu. (2020). Intergovernmental fiscal instruments for stimulating regional economic growth in Russia. Financial Journal, Vol. 12, No. 6, 54–68. (In Russ.). https://doi.org/10.31107/2075-1990-2020-6-54-68
33. Timchenko, E.N., Pogorletsky, A.I. (2022). Property taxation: transformational changes in the digital era and impact of the COVID-19 Pandemic. Financial Journal, Vol. 14, No. 3, 28–43. (In Russ.). https://doi.org/10.31107/2075-1990-2022-3-28-43
34. Pogorletskiy, A.I., Söllner, F. (2020). Pandemics and Tax Innovations: What can we Learn from History? Journal of Tax Reform, Vol. 6, No. 3, 270–297. http://dx.doi.org/10.15826/jtr.2020.6.3.086
35. Kirova, E.A., Zakharova, A.V., Dementyeva, M.A. (2020). Improving the taxation of immovable property of physical persons in the Russian Federation. Vestnik Universiteta, No. 1, 108–113. (In Russ.). https://doi.org/10.26425/1816-4277-2020-1-108-113
36. Pugachev, A.A. (2022). Transformation of property taxation as tool to reduce the monetary inequality of citizens. Economics Profession Business, No. 2, 78–85. (In Russ.). https://doi.org/10.14258/epb202225
Acknowledgements
The research was funded by the Russian Science Foundation, project No. 23-78-10160, https://rscf.ru/project/23-78-10160/
About Authors
Milyausha Rashitovna Pinskaya
Doctor of Economics, Associate Professor, Head of the Tax Policy Center, Financial Research Institute of the Ministry of Finance of the Russian Federation, Moscow, Russia (127006, Moscow, Nastasyinsky Lane, 3, building 2), Professor, Department of Taxes and Tax Administration, Faculty of Taxes, Audit and Business Analysis, Financial University under the Government of the Russian Federation, Moscow, Russia (127083, Moscow, Verkhnyaya Maslovka street, 15), ORCID https://orcid.org/0000-0001-9328-1224 e-mail: mpinskaya@nifi.ru
Rodion Vladimirovich Balakin
Candidate of Economic Sciences, Senior Researcher, Tax Policy Center, Financial Research Institute of the Ministry of Finance of the Russian Federation, Moscow, Russia (127006, Moscow, Nastasyinsky Lane, 3, building 2), Senior Researcher, Center for Macro and Microeconomics, Lobachevsky State University of Nizhniy Novgorod, Nizhny Novgorod, Russia (603000, Nizhny Novgorod, Universitetskiy Lane, 7); ORCID https://orcid.org/0000-0002-0494-9702 e-mail: balakin@nifi.ru
For citation
Pinskaya, M.R., Balakin, R.V. (2023). Fiscal Implications of a Complete Conversion to Taxation of Property of Organizations in Russia on the Basis of Cadastral Value. Journal of Applied Economic Research, Vol. 22, No. 4, 834-860. https://doi.org/10.15826/vestnik.2023.22.4.034
Article info
Received August 29, 2023; Revised September 30, 2023; Accepted October 11, 2023.
DOI: https://doi.org/10.15826/vestnik.2023.22.4.034
Download full text article:
~634 KB, *.pdf
(Uploaded
12.12.2023)
Created / Updated: 2 September 2015 / 20 September 2021
© Federal State Autonomous Educational Institution of Higher Education «Ural Federal University named after the first President of Russia B.N.Yeltsin»
Remarks?
select the text and press:
Ctrl + Enter
Portal design: Artsofte
Contact us
Rector's Office
Rector, Dr. Victor Koksharov
Tel. +7 (343) 375-45-03, e-mail: rector@urfu.ru
Vice-Rector for International Relations, Dr. Maxim Khomyakov
Tel. +7 (343) 375-46-27, e-mail: Maksim.Khomyakov@urfu.ru