Risk Controlling And Effect: A Study Of Enterprise Tax Planning

With the development of Chinese market economy, especially after China joined WTO, tax planning gradually becomes the main tool, for enterprises to lessen their tax burden and maximize their earning after taxes. However, people tend to misunderstand the definition of tax planning, due to the obstacles of notion and misjudgement about corresponding enterprise behavior. Therefore, it is of great significance to understand the signification of tax planning correctly, to face the risk of tax planning actively and to implement tax planning in Chinese enterprises more efficiently. This paper summarizes the basic concepts of tax planning. Firstly, it illuminates the definition of tax planning. Then it indicates the basic theory and clarifies its principles, and analyzes the relationship between tax planning and supervising tax by law. Following these, this paper introduces approaches and techniques about tax planning, and gives some comments on them. A model has been developed by employing game theory, which explains how enterprises should choose their tax planning in the condition of symmetric or asymmetric information. This model highlights the conclusion that tax planning is the optimal choice for enterprises when certain probability is achieved. Enterprises should realize that tax planning as a system project brings merits with risk, when they decide to choose their tax planning. This paper studies risk types and characters of tax planning, and divides them into two classes, that is general risk and individual risk. Based on this division, the risk controlling system has been constructed. In order to eliminate the loss caused by failure of implementing tax planning, the paper points out that enterprises should face the existing risk, firmly build up risk consciousness and set up efficient risk controlling system so as to take measures in time. In addition, tax planning has other effects while gaining tax saving. This paper also analyzes supply and demand effect, income effect and domination effect etc. from the aspects of micro-economy and macro-economy, according to the relevant expertise of western economics and financial management subjects. The results indicate that tax planning will exert positive effects on the government and those enterprises. Enterprises can employ it to raise tax saving and maximize its value; Meanwhile, the government can guide enterprises by using tax planning to realize the intention of macro-economic control. Based on those findings, this paper develops corresponding countermeasures and suggestions from the point of view of the government, social intermediary and enterprises to help enterprises implement tax planning better.