EXPERIENCE OF DIRECT TAXATION IN EU COUNTRIES FOR UKRAINE IN THE CONTEXT OF EUROPEAN INTEGRATION PROCESSES

Abstract

Introduction. Direct taxes are the main source of budget revenues in EU countries, providing stable income. Ukraine has identified integration with the EU as a strategic direction for the country's development and has committed to adapt its tax legislation to EU norms. The analysis of direct taxation in the EU and the application of best practices in Ukraine will help to improve the domestic direct taxation The purpose is to analyse the peculiarities of PIT and CIT collection in the EU countries and to identify areas for improving the collection of personal income tax and corporate income tax in Ukraine, taking into account the best practices of European countries. Methods. The authors used the dialectical approach as the main scientific principle of studying the process of collecting direct taxes, as well as the method of observation and the statistical method; methods: economic analysis, deduction and induction, comparison and generalisation. Results. It is established that the main budget-forming direct taxes in the EU countries, as well as in Ukraine, are PIT and CIT. The EU has tax sovereignty of the member states and partial harmonisation of direct taxation aimed at ensuring the functioning of the EU single market. The collection of direct taxes by EU member states shows a variety of approaches to their application. PIT is levied in most EU countries on a progressive scale. Currently, the EU is reforming the PIT to mitigate the effect of ‘bracket creep’. It has been found that CIT rates have tended to decline in recent years, which is due to the attraction of investments and the strengthening of the fight against tax evasion. At the same time, CIT revenues remain stable. Conclusion. For Ukraine, possible steps to improve the taxation of personal income could be the introduction of a progressive taxation scale with a tax-free minimum for the least protected groups of the population. The fiscal efficiency of the corporate income tax could be improved by strengthening administration measures, introducing quarterly corporate income tax reporting for all taxpayers, and introducing a mandatory submission of a SAF-T UA.