A Study On Legal Risk Management Of Tax Planning

At present, the theory and practice about tax planning are both at the initial stage in our China. So the difference in the theory and concepts about tax planning are far more than its consistency, which undoubtedly leads to both taxpayers and tax authorities have no improper treatment of tax planning: many of strategies and methods of tax avoidance or tax evasion have been taken into practice in the name of tax planning; tax planning in the practice receives the resistance and boycotting from tax authorities. Correspondingly, the effective system of legal risk management of tax planning(Hereinafter referred to as SLRM) has not been generally established, or even the ideas about risk management has not been accepted by small and medium enterprises, which always have to struggle to cope with the risk of accidents after they have come into truth. Even if established by some enterprises, the SLRM is always designed to financial risk rather than legal risk. Based on consideration of risk prevention and control, tax planning is defined as a strategy and tactics of tax savings that on the premise of comply with and respect tax laws and its intensions and purposes, taxpayers arrange their business standards by the rationalization of the tax burden. What's more, legitimacy and legality are taken as typical and prominent characters. However, taxpayers still face legal risks during the implementation process of tax planning. Based on the theory of risk management and corporate governance, the Ideas and Strategies about SLRM should include but not be limited to the followings:â… . The ideas of legal tax savings and legal risk management, namely, taxpayers should take tax planning rather than tax avoidance or tax evasion as optimal choice of tax-savings strategies.â…¡. Scientific risk assessment, Meaningly, taxpayers should identify risk resources and evaluate their effects and meanings,which will offer the basis of personalized SLRM.â…¢. Personalize methods coping with legal risks: risk aversion, risk retention or risk transfer (risk deflection), which depends on the risks themselves and taxpayers'risk management. What be emphasized is that taxpayers should make full use of the professional advantage of tax agents, and also prevent moral hazard and negligencefrom the taxpayers, when the risk transfer is taken into practice.