MODERN MODELS OF INCOME TAXATION OF PERSONS ENGAGED IN INDEPENDENT PROFESSIONAL ACTIVITIES

Abstract

The article examines the current models of taxation of income derived from independent professional activity in European countries, in particular, on the example of individual attorney-at-law activities. It is established that different countries of the European Union have different rules governing the taxation of independent professional activity. In the legislation of the countries we have studied, such activities are not always taxed under the usual personal income tax. In the United Kingdom, this is done based on the Income Tax Act, namely the Personal Income Tax. The same is true in Denmark, under the Income Tax Act, but it is called income tax. In France, independent professional activity is taxed according to the same rules as the activities of all individuals. However, the French legislator has created special taxation rules for entrepreneurs engaged in independent professional activities. The latter can apply the micro-entrepreneurship system, which provides for a simplified taxation and accounting system. In Germany, individuals engaged in independent professional activities must pay income tax, plus additional social contributions that covers certain social services, such as health insurance and pensions; in France, similar taxation rules also exist, but here independent professionals can use special taxation systems that provide a tax rebate for low-income individuals; in the UK, lawyers have various opportunities to optimize tax deductions, as their income and Some attorneys may use different forms of taxation to reduce their tax costs. In addition, in the European Union, there is an obligation to register as a value added taxpayer and pay it. It is summarized that the tax burden in the studied countries is higher than that of individuals engaged in independent professional activities in Ukraine. However, in the studied countries (unlike Ukraine), independent professional activity can be used as an entrepreneurial activity. Taxpayers engaged in such activities may use the peculiarities of simplified taxation and accounting systems. In addition, depending on the level of income, such taxpayers are subject to different rates, i.e. progressive rates (the higher the income, the higher the rate). The study suggests that proper taxation of individual practice of law helps to ensure the financial stability of attorneys and facilitates the effective exercise of their professional activities. However, it is important to remember that taxation is not an end in itself, but only a tool for ensuring economic stability and development of the state.