Study On The Tax Planning For SMES

With China's continuous opening up and further development of the market economy, particularly China's entry into WTO, enterprises now pay more attention to enhancing the company's value by implementing tax planning. SMEs are an important component of the national economy and play a pivotal role in China's economic development and social stability. However, in the current tax environment, a significant number of SMEs are ill-informed in both the theoretical and practical tax planning operation and part of them even lose profits because of blind operation. By citing interrelated instances, the article illustrates the specific applications on SMEs'tax planning in order to reduce tax burden and achieve legitimate interests for the SMEs.The article is divided into five parts. Part one theoretically explains the concept of tax planning and discusses the relationship between tax planning, tax evasion and tax avoidance and elaborates on tax planning content, objectives and cost. Part two focuses on the necessity of tax planning for SMEs and analyzes the favorable conditions and the negative factors. Part three points out the main problems of SMEs'tax planning and the reasons. Part four focuses on the contents and methods of tax planning for SMEs. Three processes are elaborated in this part: setting up, financing and operating. In the operating process, enterprise income tax planning, value-added tax planning, personal income tax planning are specifically discussed in order to clearly define how to do tax planning. The Final part put up suggestions for SMEs which they should pay more attention to.