Post by account_disabled on Feb 25, 2024 1:51:05 GMT -5
Franciscan simplicity: the institute would substantiate a “ tax engineering” mechanism , which, ultimately, would drain resources from public coffers. In short, it would be an unjustified tax waiver mechanism that, as it generates abuse, deserves to be promptly addressed.
Without any harm to the fundraising claims, this simplistic view seems to have failed to understand why this “ fence” was placed there. Therefore, it seems that its review still requires special reflective effort. And in the attempt to corroborate this effort, two stand out among the ways that motivated the creation of the institute.
The first of them, essentially “ accounting” , was well B2B Email List by professor Eliseu Martins in his article “ A little history of interest on equity” . As the professor demonstrated on that occasion, the moment in which interest on equity was introduced coincided with the extinction of the monetary correction of balance sheets, which occurred on December 31, 1995.
This institute, despite being criticized in several aspects, meant that, to some extent, only the increases (profits) actually earned by an entity were taxed. After all, as the professor rightly pointed out, “ the only profit is the increase in assets in excess of the inflationary effect” . Therefore, with the extinction of the correction model, pure and simple taxation began using the system of “ nominal profit, and no longer that of effective profit (after removing the effects of inflation)” .
This circumstance created a scenario of competitive inequity. This is because one of the practical effects of the monetary correction of balance sheets was the correction of the companies' net assets, which allowed the calculated profit to reflect only the effective additions to the companies' residual interests, already deducted from the inflationary increase earned by them. In other words, an effective profit was calculated corresponding to the real increase, net of the nominal increase calculated only for the purpose of maintaining the purchasing power of the residual interests already obtained.
In this area, there was an incentive for companies to resort to capitalization with their own resources. After all, with the correction, the effects of the inflationary increase in their net worth would be eliminated, which put these companies on an equal footing with those that resorted to capitalization with third-party resources — whose reported profit was already net of the inflationary debt charges, deductible as a financial expense.
Therefore, the end of the correction ended up encouraging companies to resort to capitalization via third-party resources — loans, for example. After all, a taxable profit closer to that actually earned was determined, as the inflationary result was eliminated with the deductibility of financial expenses related to it.
Without any harm to the fundraising claims, this simplistic view seems to have failed to understand why this “ fence” was placed there. Therefore, it seems that its review still requires special reflective effort. And in the attempt to corroborate this effort, two stand out among the ways that motivated the creation of the institute.
The first of them, essentially “ accounting” , was well B2B Email List by professor Eliseu Martins in his article “ A little history of interest on equity” . As the professor demonstrated on that occasion, the moment in which interest on equity was introduced coincided with the extinction of the monetary correction of balance sheets, which occurred on December 31, 1995.
This institute, despite being criticized in several aspects, meant that, to some extent, only the increases (profits) actually earned by an entity were taxed. After all, as the professor rightly pointed out, “ the only profit is the increase in assets in excess of the inflationary effect” . Therefore, with the extinction of the correction model, pure and simple taxation began using the system of “ nominal profit, and no longer that of effective profit (after removing the effects of inflation)” .
This circumstance created a scenario of competitive inequity. This is because one of the practical effects of the monetary correction of balance sheets was the correction of the companies' net assets, which allowed the calculated profit to reflect only the effective additions to the companies' residual interests, already deducted from the inflationary increase earned by them. In other words, an effective profit was calculated corresponding to the real increase, net of the nominal increase calculated only for the purpose of maintaining the purchasing power of the residual interests already obtained.
In this area, there was an incentive for companies to resort to capitalization with their own resources. After all, with the correction, the effects of the inflationary increase in their net worth would be eliminated, which put these companies on an equal footing with those that resorted to capitalization with third-party resources — whose reported profit was already net of the inflationary debt charges, deductible as a financial expense.
Therefore, the end of the correction ended up encouraging companies to resort to capitalization via third-party resources — loans, for example. After all, a taxable profit closer to that actually earned was determined, as the inflationary result was eliminated with the deductibility of financial expenses related to it.