Orobinskaya, I. V. Mechanism of Earnings Stripping for Members of the Consolidated Group of Taxpayers in the Agricultural Sector Through Establishing Reserve Funds for Doubtful Debts

Abstract: The subject of the research article is the economic relations arising in the process of taxation of integrated unites in the agricultural sector of the Russian Federation. The idea of consolidated accounts was introduced by the Russian Tax law when the amendments to Clause 1 of Article 246 of Chapter 25 of the Tax Code of the Russian Federation came into force. Today members of the consolidated group of taxpayers perform their duty to pay corporate profit tax according to the accounts kept by the responsible member of the group. Holding companies use consolidated financial flows when all available monetary funds are consolidated and used to satisfy the general needs of a company but not to pay off expenses of a single legal entity. Consequently, it is a crucial task to reallocate accounting earnings estimated per quarter at the end of year in order to reduce the amount of advanced tax payments and therefore lower the general financial load and the need for borrowed monetary funds. Theoretical and methodological background to the issue discussed includes fundamental concepts offered by Russian and foreign researchers as well as laws and regulations issued by the state authorities, federal laws, presidential decrees and government resolutions of the Russian Federation and materials of the scientific and practical conferences that discuss taxation of agricultural producers. The author of the article uses logical, monographic, statistical, mathematical and other methods of economic research. The scientific novelty and practical importance of research is that the author has developed and tested a methodological approach to the tax optimization at integrated units of the agricultural sector through establishing reserve funds for doubtful debts. According to the author, the approach allows to raise their economic efficiency. In the author’s opinion, establishment of reserves for doubtful debts may allow to reduce the tax burden in case of non-payments of counter agents which is especially important for the relations between an agricultural holding and counter agents, i.e. agricultural companies consuming agricultural products.

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