Tax Planning refers to the Planning of tax-related businesses and the preparation of a complete set of Tax operation plans in order to achieve the purpose of Tax saving.
Tax planning originated in the West. In the middle of the 19th century, Italian tax experts emerged to provide tax advice to taxpayers, including tax planning for taxpayers from that time. Tax planning is very common in developed countries, has already become a mature, stable industry, the trend of specialization is very obvious. Nowadays, more than 60% of enterprises in the United States entrust tax agents to handle their tax works, while in Japan it is as high as 85%. In the United States, the annual output value of tax planning consulting industry is about $100 billion.
With the development of market economy and the establishment of modern enterprise system, the concept of establishing and perfecting the cost constraint mechanism of microeconomic subject has been deeply rooted in people's hearts. Enterprises no longer only focus on extending their financial resources, but also pay more attention to effectively control internal and external costs. Tax planning, as one of the best means to implement expenditure reduction, can reduce the cost of tax payment and effectively help enterprises to maximize their value under the premise of legality.
Tax planning is carried out under legal conditions. It is an optimization choice of tax payment after comparative analysis and research on the tax laws released by China government.
From the concept of tax planning, we can see that tax planning is based on the premise of not violating the current tax laws and regulations of China, otherwise, it will constitute illegal tax behavior. Therefore, taxpayers should have considerable legal knowledge, especially clear about relevant tax law knowledge, know the boundary between illegal and not illegal.
The legality of tax planning is the most basic feature of tax planning. Specifically, the ways used in tax planning are in line with the current tax laws and regulations and do not conflict with the current national tax laws and regulations, rather than using illegal ways such as concealment and deception. The legality of tax planning also shows that tax authorities have no right to interfere. The most fundamental way of tax planning is to make use of the legislative orientation of tax law, the imperfection of tax law or the loopholes of tax laws and regulations. The state can only take effective measures to establish, perfect and improve the relevant tax laws and regulations, so as to block the result of reducing tax burden and reducing tax costs by using tax loopholes.
Tax planning for taxpayers cannot be investigated for legal responsibility as tax evasion and tax evasion. On the contrary, the government can only acquiesce in tax planning for enterprises and improve tax laws and regulations by taking advantage of loopholes found by taxpayers in tax planning. Of course, it is legal for people to do tax planning, but it is not necessarily reasonable .The legality of tax planning requires taxpayers to be familiar with or familiar with tax policies and regulations, and to accurately grasp the boundary between legal and illegal.
As tax planning is the active use of tax law by taxpayers, it is a professional and technical planning activity. It requires planners to be proficient in national tax laws and regulations, familiar with the financial accounting system, but also to always know how to achieve the goals of corporate financial management and save tax costs under the established tax environment.
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