Principles, stages and levels of tax planning at an enterprise. Four main stages of tax planning Methods of tax planning in an enterprise
The essence and principles of tax planning. Stages and timing of tax planning. The relevance of the issue of tax planning is due to the understandable desire of taxpayers to reduce the tax burden and the equally understandable desire of the state to prevent this. The purpose of tax planning and forecasting is to assess the relationship between tax potential and actual revenues from taxes and fees and to determine the volume of economically justified revenues from taxes and fees to the budget...
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Introduction……………………………………………………………………………….....3
The essence and principles of tax planning………………………….5
Stages and timing of tax planning………………………………….10
Conclusion……………………………………………………………...14
References………………………………………………………..16
Introduction
Recently, an increasingly common way to improve efficiencyentrepreneurial activitybecomes optimization of tax payments, tax planning.
The relevance of the issue of tax planning is due to the understandable desire of taxpayers to reduce the tax burden and the equally understandable desire states prevent this.
Tax minimizationincludes, depending on the legality of specific methods of reducing the size of tax liability, illegal (tax evasion) and legal (tax optimization, tax planning) activities.
The purpose of tax planning and forecasting is to assess the relationship between tax potential and actual receipts of taxes and fees and to determine the volume of economically justified receipts of taxes and fees to the budget system in the planned period.
Tax forecasting and planning can rightfully be considered as a single process, within which decisions are regularly adjusted and measures to achieve target indicators are reviewed on the basis of continuous control and monitoring of ongoing changes.
Tax forecasting is an assessment of the tax potential and revenues of taxes and fees to the budget system (consolidated, federal and territorial budgets) and is carried out on the basis of a forecast of socio-economic development of the Russian Federation and its constituent entities in the form of a system of indicators and basic parameters of socio-economic development.
Tax forecasting includes determining the tax bases for each tax and fee, monitoring the dynamics of their receipts, calculating the levels of receipt of taxes and fees, the volume of lost income, the state of debt on tax payments, assessing the results of changes in tax legislation, etc.
The goals of tax planning are: compliance with tax laws; minimizing unnecessary tax payments, avoiding tax sanctions and accrual of penalties; maximizing profits; development of a structure for mutually beneficial transactions with counterparties; cash flow management; effective cooperation with tax planning participants; influence on legislative authorities, tax, financial authorities, protection of taxpayer rights, including judicial.
Tax planning organization of the taxpayer’s activities aimed at minimizing his tax obligations without violating the law.
Saving on taxes through the use of legal tax optimization methods can bring tangible positive results in almost any area of business activity.
For Russian entrepreneurs, tax planning is an area that has not yet been sufficiently developed. INeconomically developed countriesExtreme attention is paid to tax planning. Payment by the company tax at the standard statutory rate is evidence of ineffectivetax management. The goal of tax planning is to build an optimal business model that ensures the minimum possible tax burden.
The essence of tax planning is the recognized right of each taxpayer to use all means, ways and methods permitted by law to minimize their tax liabilities. The possibility of tax planning is due to the presence in tax legislation of a very extensive area where the rules of law are not defined with sufficient accuracy or their interpretation is ambiguous.
Tax codeThe Russian Federation indicates that “the taxpayer has the right to use tax benefits if there are grounds and in the manner established by the legislation on taxes and fees.”
Tax planning is based on the fullest and correct use of all benefits and advantages established by law, as well as an assessment of the positiontax authoritiesand taking into account the main directions of tax, budget and investment policies of the state.
The basics of tax planning include: taking into account the main directions of development of tax, budget and investment policies of the state; developmententerprise accounting policy; correct and full use of all benefits established by law; assessment of the possibilities of obtaining deferments and installment plans for the payment of taxes.
The essence and principles of tax planning
Tax planning is a legal way to circumvent taxes using benefits provided by law and techniques to reduce tax liabilities. Its essence lies in the recognition of the taxpayer’s right to use all acceptable techniques and methods to minimize their tax liabilities. The tax planning process consists of several interconnected stages. Tax planning combines elements of science and the art of analysis. Tax planning is a legal way to circumvent taxes using benefits provided by law and techniques to reduce tax liabilities.
The need for tax planning is inherent in the tax legislation itself, which provides for specific tax regimes for different situations, allows for a variety of methods for calculating the tax base and offers taxpayers various tax benefits if they act in the directions desired by the authorities.
The essence of tax planning is recognition of the taxpayer’s right to use all means, techniques and methods permitted by law (including gaps in legislation) to minimize their tax liabilities.
By type, tax planning is divided into corporate (tax planning for enterprises) and personal (tax planning for individuals). 1
Tax planning for enterprises is an integral part of strategic financial planning for entrepreneurial activities and a business plan. One of its main goals is to minimize tax payments by using all the features of tax legislation.
The principles of tax planning can be figuratively represented by the following statements and provisions:
1. “Legal tax planning is a common business practice around the world. The credo of tax planning is to focus on logic, and not on temporary holes in the legislation” (John Pepper).
2. “You need to pay taxes. But wisely” (B. A. Ragozin). Namely:
You only need to pay the minimum amount of required taxes. Make full use of the entire range of tax benefits.
Taxes must be paid on the last day of the due date.
Tax planning is inseparable from the general business activities of an economic entity.
3. Taxes cannot simply be “mechanically” minimized; they need to be optimized, because:
A reduction in some tax payments may lead to an increase in others;
Minimizing taxes by attributing expenses to cost reduces the financial result and hinders business development;
A mechanical reduction in taxes can lead to the superiority of the form over the substance of the transaction and to its challengeability by the tax authorities.
4. “The goal of tax minimization is not to reduce any tax as such, but to increase all financial resources of the enterprise. If tax minimization is carried out incorrectly, then fines will be many times greater than the planned effect of minimization. Tax minimization is only part of the larger main task facing financial management. The main task of financial management is financial optimization, i.e. choosing the best way to manage the financial resources of an enterprise” (R. F. Galimzyanov).
The tax planning process plays an important role in any business organization. The formulation of the goals and objectives of the new formation, the spheres of production and circulation in the tax process are formed into a single scheme of action, for example, deciding on the most advantageous location of the enterprise and its divisions, choosing the organizational and legal form of business activity, forming the tax field, determining all those provided by tax legislation benefits for each tax, analysis of all possible forms of transactions and the formation of a contractual field, compiling a log of typical business transactions, analysis of various business situations taking into account possible tax risks, resolving the issue of rational allocation of assets and profits of the enterprise, tax management, including the use of internal control technology tax calculations.
The need for corporate tax planning depends critically on the severity of the tax burden in the country. If the share of taxes does not exceed 15% of the total net income of the enterprise, then the need for tax planning is minimal. In such a situation, the state of tax payments may well be monitored by the chief accountant or his deputy.
With a level of tax burden ranging from 20-35% in small and medium-sized companies, it is advisable to have a specialist, and in large companies a group of specialists focused exclusively on monitoring tax obligations. For new projects, it is mandatory to engage qualified external tax planning consultants.
If taxes take 40-50% or more, then tax planning takes on a global character and becomes the most important element of all management work. Oversight of tax matters is exercised at the senior management level. Medium and large companies must have a tax planning group or department.
An important element that facilitates tax planning at an enterprise is the organization of accounting: the chosen form, methodology, content and methods of maintenance.
As already noted, current tax planning primarily involves the formation of a tax field.
In accordance with the status of the enterprise, on the basis of its charter and legislative acts in the field of taxation, the range of main taxes that must be paid to the budget and extra-budgetary funds is determined. There are several tax planning rules:
Tax planning for entrepreneurs involves choosing the optimal forms and methods for investing capital and carrying out activities under given tax rules. With some simplification, tax planning can be thought of as following the basic rules.
First: Residence status in the country of greatest income should be avoided if the residence principle is applied when taxing income from foreign activities.
Second: It is preferable to move assets in the form of capital movements rather than profits.
Third: When comparing the tax regimes of different countries, more attention should be paid to the rules for calculating taxable income, rather than to tax rates.
Fourth: You should not rush to collect income and register profits, since deferment of tax is often tantamount to exemption from it. 2
The listed rules ensure the minimization of tax obligations legally and through full disclosure of all information to the tax authorities. Such minimization of tax liabilities is usually called tax avoidance. In addition to legal methods, tax minimization can also be carried out by illegal methods, which is defined as tax evasion (tax evasion). Tax evasion occurs by concealing one's tax obligations or providing false information to the tax authorities.
Stages and timing of tax planning
The tax planning process can be divided into several closely related stages, which, however, should not be considered as a clear and unchanging sequence of actions to minimize the payer’s tax obligations. Individual issues at any stage can be resolved simultaneously with consideration of other tax issues.
At the first stage, as a rule, a decision is made to choose the most advantageous location from a tax point of view for both the enterprise itself (production, workshop, office, etc.) and its governing bodies, branches or subsidiaries. This takes into account not only the tax regime provided by local legislation, but also other provisions of tax law, for example, the possibility of tax-free transfer of income from one country to another (as in the case of using the “Dutch sandwich”), the possibility and conditions for providing tax credits and other special benefits, terms of tax agreements, etc.
The main task of the second stage of tax planning is to select the optimal organizational and legal form of a legal entity for specific business purposes. It is clear that the tax obligations of an enterprise are determined not only by the tax jurisdiction in which it is located or conducts business activities, but also by the tax regime for the distribution of profits it receives
At the same time, one general trend can be identified: an enterprise that bears unlimited property liability for obligations to its creditors is, as a rule, bound by insignificant tax obligations. An example is a general partnership, the participants of which are jointly and severally liable for the debts of the partnership with all their property. Under current Russian legislation, it is not recognized as a corporate income tax payer, which allows it to avoid double taxation of the profits it receives (which usually occurs when distributing dividends). In addition, a general partnership created by individuals is entitled to a number of benefits on local taxes and property taxation. 3
On the contrary, an enterprise established in the form of a limited liability company or a joint stock company has limited liability for obligations to creditors, which can be reduced to a minimum by applying a participation system. According to the current Russian legislation on taxation of corporate profits, such a legal entity is subject to high taxation. There is double taxation of the profits he receives when distributing dividends. Profit received by the company is taxed in accordance with the established procedure. When distributing dividends, individuals are subject to withholding tax at the rates established for taxation of income of individuals; When legal entities receive dividends (or income from equity participation in other enterprises), they are charged a tax at a rate fixed by law. Accordingly, when distributing dividends to shareholders, triple taxation occurs. If the business is carried out by a complex organizational unit (a group of interconnected legal entities), double taxation will arise at each stage of the distribution of dividends.
The first stage is the emergence of the idea of organizing a business, formulating goals and objectives, as well as resolving the issue of the possible use of tax benefits provided by the legislator (for example, for small enterprises operating in the field of material production).
The second stage is the selection of the most tax-advantageous location for the production and office premises of the enterprise, its branches, subsidiaries and governing bodies.
The third stage is the choice of the organizational and legal form of the legal entity and determination of its relationship with the resulting tax regime.
The following stages relate to current tax planning, which should be organically included in the entire management system of a business entity.
The fourth stage involves the formation of the so-called tax field of the enterprise. A tax table characterizing the tax field is compiled, in which each tax is described using certain indicators (parameters). Next, an analysis of tax benefits is carried out. At the end of the stage, a detailed plan for using benefits for the selected taxes is drawn up.
Fifth stage formation (taking into account the already formed tax field) of a system of contractual relations of the enterprise and compilation of a journal of business transactions, which serves as the basis for maintaining accounting and tax records.
The sixth stage begins with an analysis of various tax situations, comparing the obtained financial indicators with possible losses caused by penalties and other sanctions. Next, taking into account obtaining maximum financial results, the most rational, from a tax point of view, allocation of assets and profits of the enterprise is carried out.
The seventh stage is directly related to tax management in enterprises and organizations. Tax management includes organizing reliable tax accounting and monitoring the correctness of tax calculations. The main way to reduce the risk of errors can be the use of internal control technology for tax calculations.A tax table is compiled that characterizes the tax field of the enterprise, in which each tax is described using the main financial indicators of the organization.
After this, the company’s specialists analyze all the benefits provided by law for each tax for their use in business activities. Taking into account the results of this analysis, a detailed plan for using benefits for selected taxes is drawn up.
Then, in accordance with the charter of the enterprise and on the basis of the Civil Code of the Russian Federation, a system of contractual relations of the enterprise is formed. As part of current business activities, planning of possible forms of transactions is carried out: rent, contract, purchase and sale, paid provision of services, etc.
To do this, typical business operations that the enterprise will perform are selected; various situations are developed taking into account tax, contractual and economic developments; the best options are selected and compiled in the form of blocks of accounting entries. A journal of business transactions is compiled from the optimal blocks, which serves as the basis for accounting and tax accounting.
The achievement of the maximum financial result is assessed, taking into account tax risks (possible penalties);
The most rational, from a tax point of view, allocation of assets and profits of the enterprise is carried out;
Alternative accounting policies are determined.
The accounting policy adopted by an economic entity for tax purposes is applied consistently from year to year. Accounting techniques that form the assessment of assets, the procedure for recognizing sales revenue and writing off costs have a direct connection with the taxation of the enterprise and its financial position. By varying the accounting methodology within the limits permitted by law, it is possible to choose the most profitable accounting method. Therefore, the determination and competent application of elements of accounting and tax policy is one of the areas of effective tax planning. 4
In practice, tax management includes three steps:
Organization of reliable tax accounting;
Monitoring the correctness of tax calculations;
Minimizing taxes within the framework of current legislation.
Errors in tax calculations, which are punishable by huge financial sanctions from the tax authorities, occur mainly due to insufficiently competent work of specialists in the accounting and economic services of the enterprise. According to some estimates, 75% of errors occur due to poor organization of tax accounting and only the remaining part is the result of imperfections in Russian legislation.
Conclusion
Tax planning is a special organization of the taxpayer’s activities using various methods, methods and means provided by law and not violating it, in order to minimize the taxpayer’s tax obligations over a certain time.
Despite the large number of taxes existing in the Russian Federation, the basis of the tax system and the lion's share of tax revenues are provided by only a few taxes - the so-called basic taxes. These include value added tax, corporate profit tax, road taxes, excise taxes, customs duties, and personal income tax.
The importance of direct taxes, especially corporate income tax, is falling, while indirect taxes, and especially VAT, are increasing.
The remaining taxes, largely local, make up some tax background.
Tax planning, for the most part, is aimed at minimizing the main taxes. Quite often, a reduction in basic taxes leads to a corresponding reduction in all others.
Bibliography
- Akulinin D.Yu. Fixed assets of an organization as an object of tax planning // Tax Bulletin. 2008. No. 3.
- Alexandrov I.M. Taxes and taxation. M.: Publishing and trading corporation "Dashkov and K" o", 2010.
- Veretina N.G. Tax planning as an element of the financial policy of a restructured enterprise // Finance. 2009. No. 4.
- Evsegneev E.N. Taxes and taxation. M.:INFRA-M, 2010.
- Hare N. Theory of taxes. M.: BSEU, 2010.
- Kozhinov V.V. Tax planning and forecasting the financial results of an enterprise. M.: Exam, 2008.
- Tikhonov D.N. Basics of tax planning. M.: Infograph, 2009.
1 . Akulinin D.Yu. Fixed assets of an organization as an object of tax planning // Tax Bulletin. 2008. No. 3.
2 Vilkova E.S. Tax planning should become the main part of financial management // Financier. 2009. No. 7.
3 Novikova A.I. Melnik A.D. Zolotarev V.P. Tax statistics and forecasting // Tax Bulletin. - No. 11. - 2009.
4 Yutkina T.F. Taxes and taxation. M.: INFRAM, 2009.
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Increasing the efficiency of tax planning at the micro and macro levels was announced as one of the key tasks, and its methods for 2020-2018 were identified.
This article will discuss in what ways enterprises and the state will optimize the process of transferring tax payments to the budget.
Required information
Tax planning is a set of measures that is implemented both at the state level and on the basis of individual enterprises.
Wherein:
In general, tax planning involves calculating the amount of direct and indirect tax payments, choosing the optimal taxation model, establishing the amount of turnover tax deductions, etc.
Any company in the process of its operation strives to find ways to reduce tax payments.
This can be done in two ways:
There is a fine line between minimizing tax payments as part of tax planning and tax evasion. However, the first thing is always carried out legally.
At the same time, depending on the specifics of production, geographic segment and business characteristics, approaches to it may differ slightly.
Tax planning affects all types of payments to the budget that a given enterprise is subject to - and each tax is considered separately.
Basic definitions
Tax planning is a set of actions aimed at reducing or deferring tax payments to the treasury. It is based on the norms of civil, labor and tax legislation of the Russian Federation.
Violation of any of their provisions translates tax planning into evasion of mandatory payments to the budget.
Tax optimization is synonymous with tax planning. Underneath it:
For what purpose is it carried out?
The role of tax planning as a method of reducing tax liabilities for modern business cannot be underestimated.
Therefore, its main goal is to reduce the tax burden on the enterprise, which will ensure a reduction in costs and an increase in profits.
There are a number of features that relate to tax planning in a company:
In order to determine how much an enterprise needs effective tax planning, it is enough to consider the size of the tax burden on the enterprise:
It is important to note that achieving the main goal of tax planning – reducing the burden of tax payments – is possible by:
In general, optimization can affect an individual tax payment or the entire business as a whole.
Normative base
Currently in the Russian Federation there is a whole range of legal acts that regulate tax planning issues, including:
| Indicates that citizens should be given economic rights. This includes tax planning. | |
| , | Establish a voluntary procedure for citizens and companies to use tax benefits |
| Determines the possibility for the payer to independently choose the tax regime | |
| , | Provides the right to choose the form of business activity |
| Establishes the right to independently determine the method of making monetary payments | |
| , | Indicate the possibility of choosing the nature of depreciation, write-off of goods and determining the list of direct and indirect costs |
Guided by the above provisions, a business entity will be able to organize tax planning in the best way and achieve the expected results.
Optimization methods used in tax planning
Tax optimization is implemented on the basis of a variety of tools, forms and methods of tax planning. They help reduce the total amount of taxes payable and rationalize the cost structure.
There are a number of methods on the basis of which tax optimization can be implemented. They are divided into external and internal.
External optimization methods include:
In turn, internal methods involve changes in the organization of work and management in the company itself. These include:
Internal optimization techniques appear to be less risky. However, effective tax planning involves the use of both.
Tools used
The choice of the optimal tax planning mechanism is determined by the scope and type of activity, and the regulatory framework.
However, several of its main tools can be identified, in particular:
- Different types of tax regimes.
- Tax benefits for various mandatory payments to the budget.
- Types of agreements with partners.
- Forms of business organization.
The above general tools are usually applied within a separate business entity.
However, today we can talk about the existence of several types of tax planning, each of which has its own methods, including:
If in the organization
If tax planning is carried out at the company level, then its main goal is to reduce the tax burden, which entails increasing the financial efficiency of the business.
In this situation, the most effective and efficient tools seem to be:
| Selecting an Accounting Policy | Allows you to establish once a year the procedure for determining cash receipts and expenses, movement of goods and cash, which affects the amount of taxable objects determined by calculation |
| Analytical and computational approach | Allows you to evaluate the indicators of previous years and, based on them, formulate plans regarding the volume of output (VAT and), the number of personnel (, contributions to the Compulsory Medical Insurance Fund, the Pension Fund, the Social Insurance Fund), as well as the volume of assets used in production activities (,) |
| Balance sheet method | Mainly used when building relationships between parent and subsidiary companies. It consists of analyzing indicators (assessing the condition of assets, the ratio of debt and equity capital, etc.) |
| Normative approach | Involves forecasting the amount of tax deductions for the future, taking into account current rates and expected financial results. Within the framework of this tool, three scenarios are often worked out - optimistic, realistic and pessimistic |
| Creation of a tax field is based on setting basic conditions | Forms of business organization, payer status, taxation system, deadlines for making mandatory payments to the budget, after which each payment is worked out in detail |
State planning
If we talk about state tax planning, then it is designed to monitor the implementation of quantitative and qualitative indicators for revenues to the budget, the Compulsory Medical Insurance Fund, the Social Insurance Fund and the Pension Fund.
At the same time, the tax burden should remain light, otherwise it will lead to a reduction in business activity.
Tax planning at the state level involves:
- optimization of the level of tax burden;
- formation of an optimal structure of taxes and fees;
- ensuring the maximum level of tax collection;
- creation of a rational tax control system.
To implement these tasks, government bodies represented by the Ministry of Finance and the Federal Tax Service use such financial instruments as:
- system of tax benefits;
- various tax regimes;
- agreements on double taxation issues;
- forms and types of agreements between companies and partners.
These special methods create the basis for the formation of tax planning at the enterprise. They provide a balance between the interests of the state (treasury replenishment) and economic entities (cost reduction).
If at the macro level
Implementing tax planning at the macro level involves optimizing the system of taxation of business entities, which allows generating revenues for solving political, social, economic and other problems.
In this case, tax planning is focused on solving the following problems:
- Creation of effective tax legislation.
- Building a business-friendly tax system.
- Establishment of tax rates, the amount of benefits and the nature of objects of taxation.
It is implemented within the framework of the formation of current and long-term plans that are consistent with the general socio-economic policy of the state.
Tax planning tools at the macro level include tax rates, the size and procedure for assessing objects, types of transactions, regimes and systems for collecting mandatory payments.
Their distribution into types
Tax planning is carried out at the level of the state, individual companies and their associations.
At the same time, the set of tools they use is somewhat different, but pursues the same result - rationalization of tax payments.
All tools used in the tax planning process are classified according to several criteria, namely.
According to the scope of application there are:
By nature of use there are:
As a rule, effective tax planning involves the use of a rational combination of them.
What is the result?
The results of tax planning at an enterprise are a written conclusion, which includes such aspects as:
- Methods for optimizing the procedure and structure of taxation of obligatory payments.
- Reasonable recommendations regarding the implementation of accounting policies.
As a result, such problems in the functioning of the company are solved as:
- Achieving higher competitiveness within a specific segment.
- Reduction of tax liabilities etc. as a consequence, total costs.
- Achieving more rational and efficient use of resources.
The absence of an adequate tax planning system at an enterprise, regardless of its size and scope of operation, entails unreasonable losses, deterioration in financial condition, and a drop in competitiveness.
1. Principles of tax planning
2. Basic approaches to minimizing tax payments
List of used literature
1. Principles of tax planning.
Tax planning is the taxpayer’s active actions to reduce tax payments. The main concepts of tax planning are tax optimization and tax minimization.
Taking the path of reducing tax payments, each taxpayer inevitably faces quite serious and tough opposition from the state in the person of its fiscal and law enforcement agencies.
To be fair, it is worth noting that special methods of tax control over the activities of the taxpayer are very labor-intensive and expensive and therefore have not yet become universal. However, the possibility exists that the taxpayer’s active efforts to optimize the tax burden will attract “special” attention from the fiscal authorities. It is also necessary to take into account the danger of a naive misconception (even if it has arisen as a result of many years of practice by the taxpayer) that it is possible to “negotiate” with the tax authorities. This applies both to illegal methods of negotiating with officials (gifts, discounted goods, outright bribery, etc.), which are punishable by criminal law, and to absolutely legitimate attempts by taxpayers to coordinate their positions on tax issues with the tax authorities. For example, when receiving oral advice from tax authorities, you risk receiving penalties during an audit due to incorrect advice and, at best, moral satisfaction regarding the statement of the head of the tax office that the employee who gave the answer has been reprimanded.
Any approach to the problem of savings and risk forces the use of a set of special measures to maneuver through the “tax gates” and adapt to the variability of legislation and regulatory documents. Active work in this direction with a fair tightening of tax control is unthinkable without an understanding of the principles of tax planning, regardless of the specific examples given.
The principles of tax planning refer to the basic rules underlying it. Below are the principles according to which tax planning should be carried out:
1. The principle of legality – compliance with the requirements of current legislation when carrying out tax planning.
2. The principle of profitability is a reduction in the total tax liabilities of an organization as a result of the use of tax planning tools.
3. The principle of reality and efficiency - the use of opportunities provided by legislation and tools available to a specific organization, which ensure the achievement of tax savings in a larger amount than the costs associated with their use.
4. The principle of alternativeness – consideration of several alternative tax planning options, highlighting the most optimal of them in relation to a specific organization.
5. The principle of efficiency – adjustment of the tax planning procedure in order to take into account changes made to the current legislation as soon as possible.
6. The principle of clarity and validity - the requirement that the scheme be understandable, and all its components have an economic and legal justification.
In the process of optimizing tax payments, the following principles should be adhered to:
The principle of reasonableness and economic feasibility: any scheme must be thought out to the smallest detail. The use of crude and thoughtless tax schemes will have only one consequence - the application of tax sanctions by the state.
The principle of comprehensive calculation of savings and losses. Before implementing a tax optimization scheme, it is necessary to compare potential savings and possible costs. It is likely that after this the developed scheme will not seem so attractive. Having chosen a method to reduce a tax, you need to check whether its application will not lead to an increase in other tax payments.
The principle of documenting transactions. All business transactions of the taxpayer must be carefully documented. It is necessary to analyze all legally significant documents used in a particular method to ensure their compliance with the requirements of current legislation. Close attention should be paid to documenting transactions, since negligence in registration or lack of necessary documents can serve as a formal basis for tax authorities to re-qualify the entire operation and, as a result, lead to the application of a taxation procedure that is more burdensome for the enterprise.
The principle of confidentiality. No one should know that the taxpayer’s actions are actually aimed at optimizing taxes.
The principle of comprehensive tax savings (the principle of the variety of methods used to minimize taxes).
Tax planning for enterprises is an integral part of strategic financial planning for entrepreneurial activities and a business plan. One of its main goals is to minimize tax payments by using all the features of tax legislation.
2. Basic approaches to minimizing tax payments.
Tax minimization (tax reduction) in the general sense of the word is these or those targeted actions of the taxpayer that allow the latter to avoid or to a certain extent reduce his obligatory payments to the budget made in the form of taxes, fees, duties and other payments.
Considering the direction of the taxpayer’s actions when reducing taxes (tax minimization), their content and purpose, we can say that these actions are characterized by the following mandatory features:
These are active, volitional and conscious actions;
These actions are directly aimed at reducing the amount of tax.
That is, when reducing taxes, the taxpayer acts purposefully, takes certain actions, using certain formal and substantive methods, the result of which will be tax savings. In other words, the subject of the relationship under consideration must act intentionally, aware in advance of the nature of his actions, desiring the occurrence of a certain result and consciously allowing it. Intent in the taxpayer’s actions aimed at reducing tax payments is the main component of tax reduction (tax minimization).
In this regard, it should be noted that unintentional, careless actions themselves (for example, due to negligence, inexperience or accounting errors of the relevant employees) leading to a reduction in tax payments cannot be considered as tax evasion (avoidance), although according to the current tax According to the legislation, the taxpayer in this case is not exempted from financial sanctions provided for by law.
Specific methods of reducing taxes are the direct methods and actions of the taxpayer for tax minimization. They are quite numerous and are based on many factors depending on what kind of tax we are talking about.
However, in principle, all methods can be divided into two independent categories: illegal tax evasion and legal reduction of tax payments, or else - legal tax reduction.
Illegal tax reduction or tax evasion.
This category includes methods in which the economic effect in the form of a reduction in tax payments is achieved through the use of any illegal actions, that is, actions that directly violate the law. Current legislation, in particular Russian criminal legislation, designates this category of tax optimization methods through the term “tax evasion.”
Tax evasion is a form of reduction of tax and other payments in which a taxpayer intentionally or recklessly avoids paying a tax or reduces the amount of his tax obligations in violation of current legislation.
In this case, a reduction in tax payments (as well as their complete avoidance) is carried out through the taxpayer committing tax offenses or even crimes, that is, through a direct violation of tax legislation. The actions of a taxpayer when evading taxes are illegal and illegal from the outset, that is, there is no legal evasion.
These actions can be aimed both at reducing the required amount of tax payments to be contributed to the budget, and at completely avoiding the payment of tax or taxes.
Tax evasion is most often accomplished by concealing income (profit), concealing other objects of taxation, gross violation of accounting or tax accounting rules, falsifying accounting data, failure to submit or untimely submission of documents necessary for the calculation and payment of taxes or their destruction, as well as through unlawful use of tax benefits.
Since tax evasion is achieved by illegal actions of the taxpayer, the legislation provides for various types of liability for their commission, namely: civil, administrative, financial and criminal.
When considering the many methods in this category, it should be noted that, although they are in a single category, they are nevertheless heterogeneous. However, based on the severity of the crime, the following methods can be distinguished as a result of illegal tax evasion.
Tax planningallows the taxpayer to optimize the burden on the business by applying benefits, various tax regimes and other legally provided opportunities. Read about the principles and methods of tax planning in this article.
The essence of tax planning is that fiscal and other regulatory authorities recognize the right of the taxpayer to use all means, methods, and techniques permitted by current legislation in order to reduce the tax burden. Tax planning is a whole set of measures that unite all areas of the company’s activities, while it contributes to the fulfillment of statutory goals, reducing costs and making profits.
The most effective way to increase business profitability is not simply to reduce the amount of taxes paid (this can be achieved by reducing the number of transactions and slowing down capital turnover), but to build effective management and tax planning. That is, reducing the tax burden should not be a tactical move for an enterprise, but a well-structured strategy.
In order to determine whether something needs to be radically changed in the company’s management system, you should first calculate the tax burden. Let's consider different situations:
- If the total tax burden does not exceed 15% of the company’s net income at the end of the year, then the enterprise’s need for tax planning and forecasting is minimal. To monitor the status of tax payments, the chief accountant or his deputy can monitor the status of tax payments.
- If the tax burden is from 20 to 35% for small and medium-sized businesses, then the need for tax planning is relevant. In order for forecasting and tax planning to be carried out effectively and in a timely manner, it is necessary to introduce a staff unit that should be entrusted with these functions. An individual specialist, or in large companies a whole team of professionals, will monitor all tax obligations and participate in the preparation of business plans for the next year in order to implement a business forecast. To implement large or non-standard projects, it would be advisable to engage a tax planning specialist on an outsourcing basis.
- If the tax burden exceeds 40%, then it is vital for the company to pay close attention to tax planning. Otherwise, it will simply become uncompetitive and may ultimately go bankrupt. In such a situation, tax planning should become the most important element of the work of top management. For medium and large companies, it is preferable to create a tax planning department.
In the modern business environment, the main approaches to reducing the tax burden have developed, which is the main goal of tax planning:
- application of all possible tax benefits provided for in the Tax Code;
- development of correct accounting policies that would allow using all existing gaps in tax legislation to your advantage;
- ensuring that tax payment deadlines are not missed.
The following types of tax planning are distinguished:
- corporate - carried out within one single company;
- partnership - carried out in a number of companies related to each other by form of management or business cooperation;
- national - implemented if the company’s business activities are carried out in only one country;
- international - carried out in cases where business is conducted in several countries.
General principles of tax planning
When applying certain methods, methods and techniques of tax planning, the taxpayer must adhere to the basic principles that will allow him to achieve his goals with minimal effort and without violating the law. The principles of tax planning can be divided into several main groups:
- The principle of legality, which means compliance with all tax regulations when calculating and paying tax payments. It is this principle that is fundamental; it allows one to distance and disassociate tax planning from accusations of tax evasion.
- The principle of efficiency - implies timely tax planning. This means that the company’s approved accounting and tax policies must be reviewed in a timely manner to quickly respond to changes in tax legislation that reduce the burden of paying taxes. Also, changes must be made in a timely manner in the event of the emergence of a new line of activity, expansion or other reformatting of the business.
- The principle of optimality, which involves the use of mechanisms that would lead to a reduction in the tax burden without compromising the business goals and interests of the owners of the enterprise. It should be remembered that tax planning is just a means to solve certain problems, and not an end in itself. Businessmen will need to achieve a balance between the size of the tax burden and the amount of expected profit that could be used to expand the business. Analysts need to calculate in advance what economic effect should be expected from the implementation of a particular tax planning method, whether the costs of its implementation will cover all the expected profitability both in the short and long term. It is necessary to timely calculate whether a reduction in one tax will lead to an increase in other mandatory payments.
- The principle of validity assumes that the taxpayer has prepared in advance the necessary arguments to explain to tax inspectors and defend his position in court in the event of the use of unpopular or controversial tax planning methods.
- The principle of complexity, which means that tax planning takes into account not only the norms of tax legislation, but also other legal branches, especially civil legislation.
- The principle of professionalism, which states that qualified specialists should be involved in such activities, which means competent preparation of primary documents, contracts, registers, reporting, etc.
- The principle of confidentiality, which means that the taxpayer should not disclose to outsiders the tax planning methods used by the enterprise.
Tax planning forms
Organization of tax planning can be presented in the following forms:
- systematization of information on taxation, constant monitoring of changes in legislation;
- implementation of the planned planning stages and constant monitoring of the fulfillment of all tax obligations;
- analysis of decisions made through the prism of compliance with tax laws;
- implementation of a number of measures to optimize taxation when the tax burden increases.
Tax planning usually has the following areas:
- choosing an organizational and legal form before conducting state registration;
- choosing a suitable tax regime;
- determining the object of taxation and changing it if necessary;
- change in the direction of business activities, restructuring (creation of separate divisions with other forms of taxation depending on the direction of business);
- registering a business in the optimal geographic location for paying taxes (choice of the Federal Tax Service, proximity to production assets, special economic zones, features of regional tax legislation in the form of benefits and reduced tax rates, etc.);
- full application of all existing tax benefits - for this purpose, it is necessary to regularly monitor changes in tax legislation and analyze their applicability to the activities of the taxpayer;
- planning the distribution of profits received in order to reformat the business so that additional tax benefits can be applied.
Tax planning methods
Tax planning involves the use of a set of methods aimed at reducing the tax burden and increasing the financial efficiency of a business. Tax planning includes the use of both external and internal methods. External methods can lead to global business consequences, so their use is quite limited. These include replacements that may affect the tax policy of the company (group of companies): tax subject, tax jurisdiction and type of activity.
We list the main internal methods of tax planning:
- The choice of accounting policies, approved once a year, is the most important part of planning. For example, revaluation of fixed assets allows you to significantly and legally save on paying property and profit taxes.
- The analytical and calculation method will help to carry out tax planning based on indicators for past tax periods. Thanks to this method, it is possible to include plans for changes in the approved business plan for the next year:
- volumes of work (affects income tax, VAT);
- average composition of employees (affects the payment of personal income tax and contributions to extra-budgetary state funds);
- the size (quantity) of assets used in economic activity, including land plots (affects taxes on land and property).
Tax planning for a specific business entity is the choice of the optimal, from the point of view of a specific taxpayer, combination and construction of legal forms of activity in order to reduce the tax burden within the framework of the current tax legislation.
Basic principles of tax planning:
- 1) legality, that is, compliance with current legislation;
- 2) knowledge and detailed study of the position of tax authorities, as well as judicial practice on those aspects of tax legal relations that concern optimization;
- 3) prospects, i.e. the taxpayer must foresee the consequences of incorrect application of various methods and tax optimization schemes, which may entail large financial losses;
- 4) stages of planning;
- 5) preliminary calculation of the financial consequences of planning (calculation of options for tax amounts, including turnover, based on the results of general activities in relation to a specific transaction or project, depending on the various legal forms of its implementation);
- 6) individuality of tax planning. The tax scheme of each organization and the financial scheme of each transaction are in many ways unique, and practical advice can be given in each specific case after a preliminary legal examination by specialists;
- 7) collegiality in decision-making on methods and forms of tax optimization. Experts note that the process of tax optimization is:
- - joint work of an accountant, lawyer and manager (manager);
- - constant search for new original solutions and schemes for the organization’s work;
- - constant study of specialized literature, study and analysis of the experience of other organizations in this profile and related areas of business.
The tax planning process at an enterprise can be divided into several stages:
- 1. decision making. Based on the prepared information, the first manager or his deputies carry out a decision;
- 2. preparation of a solution. Comprehensive preparation of a solution with the involvement of departments or officials indicated in the matrix;
- 3. participation in the preparation of a decision, which consists in the preparation of individual questions or information on behalf of the units or official responsible for preparing the decision;
- 4. mandatory approval at the stage of preparing a decision or making it;
- 5. execution of the decision;
- 6. control of execution of the decision.
In addition to creating a tax planning structure that is adequate to today’s economic realities, defining the powers and requirements for participants in the tax payment planning process, to successfully organize tax planning activities, it is necessary to have financial, material, technical and intellectual resources that are formed when drawing up the annual tax plan.
The material and technical resources involved in the tax planning process are determined before the creation of a group for planning activities to optimize the tax portfolio, and are formed from two parts: the first part consists of elements of the material and technical base at the disposal of those divisions of the enterprise whose employees are engaged in tax planning payments; the second part is created specifically for the purpose of functioning of the tax group. Among the entire list of material and technical resources necessary for the successful implementation of tax planning functions, a significant place should be occupied by: providing the tax group with modern information and computing systems necessary for the application of statistical and mathematical methods for determining options for the distribution of tax optimization measures; use in the process of work of an extensive library collection, consisting of normative, scientific, practical and periodical literature; use of databases of the legislation of the Republic of Kazakhstan, facilitating the search for the necessary documentation of a regulatory nature.
The financial base for organizing tax planning is formed based on the needs for implementing tax optimization measures. In addition, the management of the enterprise must formulate a policy of stimulating tax sector employees for achieving positive results in the tax planning process.
In order to improve the intellectual level of specialists in the tax planning system, a schedule of participation in thematic seminars, conferences, training courses, and advanced training courses is drawn up, for which additional financial resources are allocated. The specified schedule is also included in the tax plan of the enterprise.
An enterprise tax plan must have the following sections:
- 1. taxpayer calendar for each tax;
- 2. list of measures to optimize tax flows, time parameters for the implementation of optimization measures, responsible executors, resources and tools necessary for the implementation of these measures;
- 3. schedule of tax payments, taking into account the use of measures to optimize the tax portfolio and tax benefits for specific taxes;
- 4. schedule for advanced training of tax specialists;
- 5. other questions.
The final stage of tax planning at an enterprise is the organization of work on the formation, maintenance and storage of a database of planning and economic information, making changes to reference and regulatory information used in processing tax data.
Tax planning involves several levels, each of which requires certain knowledge and skills:
- - level one - learn tax laws and learn how to pay tax payments on time and correctly. To do this, you only need to know the list of all taxes and fees, their objects of taxation, rates, source and payment deadlines. Calculate the tax base, multiply it by the rate and attribute it to the appropriate source - that's all that needs to be done for the tax to be calculated. When making a decision regarding the implementation of any business transaction, you should carefully study the legislative field and use only official regulatory documents;
- - level two - learn to pay tax payments optimally (plan the proportionality of income and expenses in one tax period, avoid accounts receivable, that is, not pay too much), analyze the financial condition of the enterprise;
- - level three - learn to pay the minimum, using legal methods of reducing tax pressure.
Thus, the effectiveness of tax planning is significantly increased provided that it is properly and purposefully organized, which includes the formation of a team of people who will do this work, the development of a plan, goals and objectives of tax planning, as well as the development and implementation of schemes for minimizing tax payments.
