KAZAKHSTAN INSTITUTE OF MANAGEMENT, ECONOMICS AND STRATEGIC
RESEARCH
ACADEMIC AND RESEARCH COMMITTEE
KIMEP course syllabus – Fall 2013
1) Basic information
Course code and course title: ACC 3205 Principles of Taxation
Course meeting time and place:
Monday, Wednesday, 16:00-17:15 #135 / Valikhanov Building
Course Credit: Three (3) credits.
Instructor name: Vladimir Tyutyuryukov, Candidate of Science
Instructor office location and office telephone: 303 / Dostyk Building; 270-44-40
ext.2079
Instructor e-mail contact address: vnt@kimep.kz
2) Instructor availability
Office hours
Monday, Wednesday, 17:30-20:00
Other time upon appointment
Teaching assistant’s hours
Asset Syzdykov, ta.bcb.taxation@gmail.com
Monday-Thursday 16:00-18:00, Friday 14:30-18:00, 108 / New Building
3) Course description/overview
This course covers fundamental principles of taxation. During the course, students will
start building understanding of the purpose of taxation, main tax concepts, impact of
taxation on businesses, impact of taxation on financial decision making, with examples of
practical calculations as well as core principles of tax planning.
While this is only introductory course, the course is also designed with the intention to
develop student’s research capabilities and awaken further interest in studying taxation –
also giving limited opportunities to the pro-active students to start developing their
research and presentation skills both through optional research presentations.
The course materials include study of the textbook chapters and additional resources, but
include also interactive practical sessions and guest lectures.
4) Learning objectives
This is an introductory taxation course, which is designed to provide an overview of
fundamental taxation principles and tax issues relevant for any career in accounting,
economic or finance area. The course will introduce principles of taxation applied in US
(where the tax system is one of the most developed) and in Kazakhstan (overview of local
practices). By the end of this course, a student will reach the following learning objectives:
-
Knowledge:
o understanding and meaning of taxation and tax profession;
o ability to define and clarify the basics of taxation, key concepts of a good tax, key
principles of the tax system and problems as well as solutions;
o ability to explain the relationship between tax base, tax rate, and tax revenue as a
formula
o distinguishing among types of taxes and understanding their business implications;
o ability to explain why the parties to a private market transaction should consider the
tax consequences of the transaction to both parties;
o knowledge of the key sources of tax law and understanding of their interaction and
their impact on business activities and decision making;
o comprehend the concepts of tax avoidance and tax evasion;
-
Skills:
o ability to justify why different taxing jurisdictions often compete for revenues from
the same taxpayer and identify the reasons why governments continually modify
their tax systems;
o ability to determine the common differences between the calculation of book and
taxable income for accrual basis firms;
o distinguish between an arm's-length transaction and a related party transaction;
o ability to analyze and design constructive solutions to the real business cases;
-
Participation:
o effectively carry out individual research and assigned self-studying activities;
o optionally participation in special research projects and tax conferences.
Students who become interested in taxation are welcome to take subsequent taxation
courses at BCB – such as Taxation in Kazakhstan and/or Taxation of Multinational
Enterprises.
This course is also recommended to students of other specializations, who may
subsequently build on this fundamental knowledge when studying advanced tax courses.
5) Relationship of course and program
Pre-requisites: ACC2102 Financial Accounting I
Completing this course will prepare you for these other courses in the BCB
program:
ACC3210 Taxation in Kazakhstan
ACC4240 Taxation of Multinational Enterprises
6) Teaching methodology
The teaching methodology of this course includes various approaches: lectures,
presentations made by students, in-class exercises, home readings, class discussions,
case study analyses.
In addition, it will be very welcomed if students participate in the conferences organized by
the Central Asian Tax Research Center of KIMEP.
7) Assessment scheme
Methods of assessment
-
Midterm and Final Exams (closed-book)
-
Degree of participation in in-class discussions and problem-solving
-
Attendance assiduity
-
Evaluation of individual research presentations and papers by students and the
instructor
-
Participation in conferences
Attendance
10%
Students are encouraged to have full attendance and active
participation. Attendance will count 10% to the total grade. Each
student is responsible to monitor his /her own attendance.
Individual /
small group
research
activities
10%
10% goes to research paper or in-class presentation (schedule of
presentations by topic is posted on L: Drive). These could be
done individually or in teams of two. Please note that students
have to submit a draft of the presentation 1 week before the
presentation day. The days of presentations cannot be changed
due to course schedule.
The deadlines of research papers are agreed between the
student and instructor. Any violations of deadlines will be
punished by reduction of points.
Midterm exam
40%
2 tests of 20% in late February and in late March
Final exam
40%
Final examination held on the University assigned examination
date/time. The final examination will be comprehensive. Exam
may include problem solving, multiple-choice questions, essay
questions, true false questions or other forms of assessment
Total
100%
Bonus
assignments
Active participation (discussions, in-class exercises etc.) will be
remunerated by 0.5 to 1 point per class depending on extension.
Volunteering is welcome, though instructor will also call out various
students in order to grant these marks to as many students as possible
Up to 5% per assignment (rate and types of assignments will be
announced; these include participation in conferences, researches etc.)
2.5% for research for and presentation of the tax news (one introduction
of up to 2.5% per student; each news review should take 3-5 minutes
during class time and explain the effect of the event). This assignment is
strictly individual.
8) Grading scale
90 to 100
Pass
A+ 57 to 59
Pass
D+
85 to 89
Pass
A
53 to 56
Pass
D
80 to 84
Pass
A-
50 to 52
Pass
D-
77 to 79
Pass
B+ below 50 Fail
73 to 76
Pass
B
Incomplete I
70 to 72
Pass
B-
Withdraw
67 to 69
Pass
C+
63 to 66
Pass
C
60 to 62
Pass
C-
F
W
9) Course policies and instructor’s expectations of students
The students are expected to exercise ethical behaviour during classes and exams and
compliance with KIMEP policies.
Each student is responsible to monitor his / her own attendance. In a rare circumstance
that a student has to miss class (such as the birth of a child or severe illness), please
contact me.
Due to academics / research activities of the professor, certain classes might be cancelled
and replaced by extra sessions or guest lectures. Attendance on these extra classes will
be rewarded by bonus points and will be scheduled in such a way as to avoid scheduling
conflicts of students.
Using mobile phones during lectures, and exams is prohibited. Students should use only
calculators for the computations.
DISCIPLINARY MATTERS FOR CONDUCTING EXAMS
Every event of cheating during the exams should be punished.
In the case of written evidence (e.g. related to the topic notes made in the dictionaries or
on the separate sheets) the student will receive 0 points for this Exam.
Any other cases of cheating (e.g., talking, looking in another's paper, turning to the
neighbor, continuing writing after instructor announced the end of the exam) will be
penalized by subtracting 30 points from the student's grade for this Exam.
If the student will repeat cheating during one of the Exams, then this will lead to 0 point
grade for the Exam.
10) Period-by-period schedule*
We
ek
#
1
Week
dates
Topics
Learning points
Reading materials
(subject to amendment)
Introduction to
the course
Topic 1.
Introduction to
the taxation
2
Terms: tax, elements of the tax (taxable item, tax
base, tax rate, tax period, tax benefits), taxpayer, tax
agent, tax authorities, tax compliance, tax control, tax
revenue, tax jurisdiction, special economic zones
(SEZ), offshores
Concepts:
Sally Jones, ch.1, 3
Additional materials:
Mitchell - The Economics of Tax
Competition
 Functions of the taxes
 Kinds of taxpayers
 Rights, obligations and roles of taxpayers and tax
agents
 Rights, obligations and roles of tax authorities
3
 Classifications of the taxes
 Sources of tax law
 Residence-based and source-based taxation
 Tax implications for business activity (tax
planning, tax benefits)
4
Activities
Topic 2. Tax
policy issues:
standards for a
good tax
Terms: tax policy, tax administration, tax avoidance,
tax evasion
Concepts:
 Standpoint of state: source of funds
 Standpoint of business: transaction costs or cash
outflow
 Standards for a good tax: be sufficient, be
Sally Jones, ch.2
Additional materials:
V.Thuroniy, ch. 1 and 3
Principles_Taxation_Ethics
Ethical principles.pdf
In-class discussions
- What is the relationship
between tax revenue, tax
base and tax rate?
- Why different taxing
jurisdictions often compete for
revenues from the
same taxpayer?
- What are the types of taxes
levied by local governments,
state governments and federal
government in the USA? In
Kazakhstan?
- What is transaction or
activity based tax?
- Differentiate between a
regressive, a proportionate,
and a progressive tax rate
structure
- Explain the difference
between marginal and
average tax rate
In-class discussions
- What are the four standards
of a good tax?
- Explain the difference
between the income effect and
the substitution effect
- Define horizontal and vertical
equity
convenient, be efficient, be fair
Tax law design – Summary
 Illustration of other principles of the taxation
(economic, organizational, ethical, legal)
 Effects of the taxation (revenue, redistribution,
repricing, representation)
 Effects of the increase in taxes (income effect,
substitution effect, avoidance, evasion)
 Influence of international organizations on the tax
policy
 Process of tax law designing, drafting, adoption
and enforcement
5
Topic 3. Tax
Professionals
and their roles
Concepts:
V.Thuroniy, ch. 5
 Tax professionals and their roles
o Consulting: tax consultant, tax manager, tax
partner
o Industry: tax accountant, tax manager
o Public service: tax officer, tax policymaker
 Regulation of tax professionals
Additional materials:
Treasury Department Circular No. 230
(notably §10.3, 10.4, 10.20-10.22, 10.2710.37)
Uzbekistani law on tax consulting:
http://www.pnk.uz/node/11
Student presentations:
 Tax professionals in
business and requirements
for them (based on
research of job offers for
the positions of tax
consultant, tax accountant,
chief accountant, tax
manager, tax partner)
 Tax professionals in civil
service (tax inspectors, tax
policymakers)
 Regulation of tax
profession: general
approach
 Regulation of tax
profession in selected
countries (Kazakhstan, US,
Uzbekistan, Germany)
6
Topic 4.
Taxation of
property
Terms: property taxes, taxes on transfer of property,
land tax, real estate tax, tax on vehicles (motor
vehicle tax),
Concepts:
V.Thuroniy, ch. 9
Student presentations:
 Who pays tax on property
(comparative analysis)
Additional materials:
 Approaches to valuation of
 Ownership and use as taxable events
The Illinois Property Tax System
 valuation vs. natural measurement
Land Tax in NSW, Australia 2011
 ecology-based taxation
 reporting requirements
 Taxation of transactions
involving property
 jurisdiction of taxation
Topic 5.
Taxation of
personal
income
Sally Jones, ch.13, 14 (sections “Wage
and salary payments”, “Employee fringe
benefits”, “Employment-related
expenses”, “Retirement planning”), 16
Student presentations:
 Global approach vs.
schedule approach in KZ
and foreign tax systems
 Global approach and schedule approach
Additional materials:
 Pay-as-you-earn: treatment of salary income
V.Thuroniy, ch.14
 Calculating and reporting
personal income tax
Terms: active income, passive income, fringe
benefits, gross income, adjusted income, filing status,
dependent
Concepts:
 Gross income reporting
 Deduction of personal expenses
 Tax credits and allowances
 Flat rate vs. progressive rate
 Family taxation
 Reporting requirements
 Social security contributions
Skills:
8
9
Midterm
 Ecology-based taxation (on
example of motor vehicles)
 Country-specific approach
to property taxation (US,
Kazakhstan, Australia, New
Zealand)
 difference between taxation of corporate and
personal property
7
a property
 Withholding taxation vs.
self-assessment: pro,
contra and feasibility
 Family taxation: concept,
mechanism and differences
from individual taxation
 Fringe benefits: concept
and tax consequences
 Social security
contributions: concept and
differences from a tax
 Basics of personal income tax calculation
(treatment of different types of income, use of
allowances, amending tax liability)
In-class discussion
TEST 1
Case studies
 Flat rate vs. progressive
rate (based on students
research of pro and contra
arguments)
Break
10
Topic 6.
Taxation of
corporate
income
Concepts:
Sally Jones, ch.5, 6, 17
 Cash vs accrual method
Additional materials:
 Concept of income and tax treatment of different
types of income, differences between IFRS and
tax law
V.Thuroniy, ch.16, 17
tax_control_framework_en
 Treatment of different expenses
Student presentations:
 Use of cash and accrual
methods in tax calculations
 Explaining differences
between financial results
and taxable profit
 Types of expenses:
deductible, limited and nondeductible
 Property acquisitions and cost recovery
deductions
 Capitalization or deduction?
Tax treatment of propertyrelated expenses
 Loss carry-forward
 Tax compliance
Skills:
 Explaining loss carryforward and loss carry-back
 Basics of corporate income tax calculation
(treatment of different types of expenses, filling in
tax return, separate reporting of some projects)
 Tax compliance procedures
In-class case study
 Corporate income tax
return review and
discussion of treatment of
different items
11
Topic 7.
Income tax
planning
Concepts:
Sally Jones, ch.4
 Basic maxims (time variable, entity variable,
jurisdiction variable, character variable)
Uckmar - International tax planning forms and measures of counteraction
 Tax accounting policy
 Supply chain management
 Structuring of business
Skills:
 Identification of possibilities to manage tax costs
(use of benefits, use of different tax regimes for
companies, use of different tax jurisdictions)
Student presentations:
 Explaining basic maxims of
tax planning (with
examples)
 Supply chain management
(mechanism and use for tax
planning)
 Combating tax avoidance
(overview of measures
adopted by tax authorities)
In-class case study
12
Topic 8.
Taxation of
turnover (VAT,
Excise duties,
Sales tax)
Terms: value added, incoming/input VAT,
outgoing/output VAT, offset/deduction of input VAT,
place of supply
V.Thuroniy, ch.6 and 8
Council Directive 2006_112_EC of 28-112006 on the common system of VAT.pdf
 Features of VAT
(correspondence between
price and VAT, VAT-able
operations, reverse-charge
VAT, offset of VAT)
Concepts:
 Features of VAT, excise duties and sales taxes
 Tax base of turnover taxes
 Calculation of output VAT (notion of price
including and excluding VAT)
 Place of supply rule
 Offset/deduction of input VAT
 Tax free shopping
 Treatment of VAT on import
 Excise duties: excisable
goods and methods of
calculations
 VAT on export and its refund
Skills:
 Duty-free shopping
 Identification of indirect tax consequences
 Indirect taxes and ecommerce
 Differentiating between use of 0% VAT rate and
exemption from VAT
13
14
TEST 2
Topic 9.
International
taxation of
income and
property
Student presentations:
 Sales tax: features and
issues
In-class case study
 VAT calculations
Terms: tax residents, non-residents, permanent
establishment (PE), source-based taxation,
residence-based taxation, tax treaty, double taxation
avoidance treaty (DTT)
V.Thuroniy, ch.18
Concepts:
Handout-Principles of International
Taxation Chapter 2 Introduction.pdf
 Tax competition
Additional materials:
 Model tax treaties
Article DTT.pdf
 Tax treatment of different types of income,
International Tax Planning.pdf
 Harmonization of taxation in economic unions
Student presentations:
 Tax residence
 Permanent Establishment:
concept and how to
determine
 Economic and legal double
taxation: how it happens
 Tax treaties and their
models
 Anti-abuse rules (including black lists of offshores)
 International taxation and
business structuring
 Anti-avoidance rules: general, transfer pricing,
 Abuse of tax rules
thin capitalization, controlled foreign company
(CFC)
15
Student presentations:
 Overview of anti-avoidance
rules (one presentation for
each type)
Skills:
 Identification of international tax consequences
 Tax competition
 Rules of economic unions
and domestic law
16
Topic 10.
Special tax
regimes
Terms: general tax regime, special tax regime
[Handouts]
Concepts:
[research done by students]
 Special regimes for small businesses (reasons for
introduction, simplified tax accounting, simplified
tax base calculation)
 Special regime for extraction industry (reasons for
introduction, mineral extraction tax/royalty, excess
profits tax)
Student presentations:
 Taxation in special
economic zones
 Definition of small business
 Special tax regimes for
small businesses
 Taxation of mineral
extraction industry: royalty
 Special regime for agriculture (reasons for
introduction, special determination of tax base,
VAT incentives)
 Taxation of mineral
extraction industry: productsharing agreements
 Incentives for R&D activities
 Taxation of innovative
businesses
Final Exam
* May be amended as required by the circumstances
11) Instructional resources
First item in relevant cell covers most of the section. Other items add more value.
Please consider the structure of each publication. It may contain too specific sections – in this case run through them to obtain just
understanding. The important sections are those dealing with definitions and principles, main elements of taxes, mechanism of assessing
and collecting of the tax, mechanism of tax management and tax administration.
International-based
 Victor Thuronyi. Tax Law Design and Drafting. Available at www.imf.org/external/pubs/nft/1998/tlaw/eng/ and with instructor (at
request)
 Presentations and handouts
US-based
 Sally M. Jones. Principles of Taxation for Business and Investment Planning (2007 edition) – available in library
Kazakhstan-based
 The Tax Code of the Republic of Kazakhstan effective in 2012. Available on L: Drive, on web-site of Tax Committee of Ministry of
Finance (www.salyk.kz) and in Paragraph database.