Taxation of income of individuals: foreign practice

Abstract

Relevance of research topic. At present, many of the problems that foreign countries have to solve in connection with transformation processes and affecting the financial stability of their economies are similar in nature to the problems that exist in Ukraine. Therefore, the study of foreign practice of taxation of personal income is extremely relevant. Formulation of the problem. The system of taxation of personal income in each country is a significant regulator of the relationship between the state and citizens - taxpayers. On the one hand, it provides the financial base of the state, and on the other hand, it acts as the main instrument for the implementation of its economic doctrine. Therefore, by setting the size of taxation of income of individuals, the state seeks to ensure a stable income base and influence the amount of citizens' savings in order to the optimally implement the development strategy. Analysis of recent research and publications. Theoretical principles of taxation have been developed in the works of such prominent scientists as A. Wagner, D. Keynes, A. Laffer, D. Mill, F. Nitti, D. Ricardo, and A. Smith. The study of taxation of individuals in Ukraine and other countries is carried out in the works of such domestic scientists as: V. Andrushchenko, L. Barannyk, O. Vasylyk, V. Melnyk, S. Onyshko, A. Sokolovska, L. Tarangul, V. Fedosov, L. Shablysta, S. Yuriy, I. Yakushchyk and others. Selection of unexplored parts of the general problem. Ukraine lacks experience in effective taxation of personal income. Therefore, it is advisable to deepen the study of the issues of identifying elements of the positive experience of foreign countries that have some success in this matter, and to determine whether they can be applied in the practice of taxation in Ukraine. Setting the task, the purpose of the study. The aim of the work is to identify the leading foreign experience in the taxation of personal income, systematize its positive elements, as well as develop proposals for the possibility of their implementation in Ukraine. Methodology for conducting research. Methods of system-structural analysis and synthesis, dialectical and methods of generalization, grouping, comparison and other methods became a methodological basis of the article. Presentation of the main material (results of work). The article analyzes the experience of foreign countries in the field of personal income taxation, presents the author's understanding of the possibility of its implementation in domestic tax practice. Methods of personal income taxation in different countries of the world are considered. The field of application of results. The research results can be used in the practice of taxation in the process of its improvement. Conclusions according to the article. The experience of foreign countries in the taxation of personal income is rich in useful examples. The analysis showed that the lowest income tax rates are characteristic of countries with lower economic development rates and usually without the use of progressive taxation. High - inherent in the developed due to the presence of a progressive scale of taxation, which makes it possible to transfer the tax burden of the less well-off strata of the population to more well off. Improving the system of taxation of personal income, Ukraine should take into account the fact that all foreign countries, in order to achieve greater interest of citizens in paying taxes, to establish greater social justice, differentiate their approach to tax collection depending on the amount of their income. This is a successfully proven mechanism for combating tax evasion and, accordingly, filling the budget.

Keywords

• budget
• deductions
• state
• source
• tax benefits
• personal income tax
• income tax
• tax regime