Protective interest rate as tax instrument of corporate capital protection

Abstract

This paper deals with researching negative consequences of allocation of economic (virtual) gains made as a result of conventional accounting concept by facing current income with historical expenses and necessity to promote additional stimulating instruments that are at disposal by the state in order to eliminate these negative consequences. one of them is certainly protective interest as a relatively new active fiscal instrument of capital protection and recognition of price of invested owner's equity in business ventures, i.e. a specific form of compensation by the state for invested capital bearing in mind, that no source is free, including ones own sources. We also showed mechanisms of protective interest which, together with other measures of macroeconomic policy, should contribute to the protection of real purchasing power of company equity and increase of net gain, left on company's disposal for new investments, new work places, more money in the budget, protection of actual assets against taxing in the conditions of inflation, etc.

Keywords

• interest
• protection
• capital
• inflation
• tax