Research On Enterprise Tax Planning

The scope of this article involves enterprise tax planning and developing a systematic, thorough research into enterprise tax planning from the perspectives of financial management and accounting. This article comprises of eight sections.The first section defines the concept of enterprise and analyzes taxation regulations currently applied in China. The research focusing on enterprise tax planning has particularly important implications both in theoretical and practical backgrounds. The article then develops in terms of three perspectives, enterprise, financial management and accounting.Second section, which focuses on the fundamental theory of enterprise tax planning, defines the scope of enterprise tax planning. It argues that enterprise tax planning is a group of activities. Enterprise tax planning can help reduce the tax amount or, by redefining the tax basis, tax rate and taxable amount, delay the payment time of the tax with the goal of earning time value. The author also discusses the implication of taxation burden, indicators of measurement, explicit tax and implicit tax, and the judgment principles of taxburden in tax planning. The article analyzes the tax saving and tax shields using game theory, analyzes the tax contract between government and enterprises, margin..and tax planning under the condition of symmetrical uncertainty using contract theory.The third section of this article covers enterprise investment and its relationship with enterprise tax planning. Taxation has significant influence on enterprise investment mainly because it changes the cost of capital. The article furthers its general analysis of tax planning for enterprise investment and then undertakes several case studies. The tax planning on project investment focuses on capital assets and research/development costs. The enterprises should take into consideration the location of investment, the particular industry, organization structure, and taxation identification before implementing tax planning.The fourth section focuses on financing and its relationship with ETP. The article analyzes the influence taxation has on capital structure, exploring the tax benefit and related limitations of financing the business with debt (leveraging the business) under China's taxation environment and analyzing the tax planning for refund of re-investment.The fifth section of the article discusses dividend policy and its relationship with ETP. To understand the influence of the taxation on dividend policy, the article discusses M&M's theory of irrelevance of dividend policy, clientele effect and the influence of taxation on CAPM. The article also discusses the tax planning for dividend policy in China, remittance of earnings from other countries and the ETP for the deduction of paid tax.The sixth section covers enterprise re-organization. Re-organization is a common activity in today's business world, the taxation factors the business should consider when facing re-organization include factors related to the objective structure and those related to the process of re-organization. The article then analyzes the initiatives of acquisition and merger of enterprises with respect to taxation, explores the tax planning of taxable merger and non-taxable merger, analyzes the taxation initiative of enterprise split and reviews tax planning of taxable split and non-taxable split.The seventh section relates to transfer pricing. The article analyzes the tax initiative of transfer pricing, arguing that transfer pricing has its inherent taxation risks and providing the method to deal with.The last section is mainly about tax accounting. The existence of inter-relationship of tax and accounting leads to the birth of tax accounting. The article examines the definition, objectives, goals, and principles of tax accounting. The fundamental roles of tax accounting in tax planning are obvious. For example,tax accounting provides tax planning with tax-related information, accurate tax accounting is a necessity of tax planning, and tax accounting helps the enterprise understand t...