A Study On Tax Planning For China's Auto Industry

Controlling the enterprise's operating costs including tax cost reasonably and effectively is the financial management objective of each enterprise.By systematical tax planning, taxpayers can reduce the tax burden of enterprises reasonably, lawfuly and effectively, and contribute to the implementation of business strategy and maximization of enterprise's value. China's auto industry in recent years has seen rapid development.It has become an important driving force of national economy.The enormous room for growth of automotive market in China is attracting domestic nongovernmental capital and foreign capital to stream into the auto industry.Thus, the competition among auto enterprises will be more and more violent.As a result of the factors of market competition and national policy, a great number of M&As aimed at China's auto industry structural optimization and upgrading will come forth, and will help stimulate market centralization.Under the pressure of survival of the fittest, auto enterprises with great tax burden have to minimize the tax cost by tax planning, so as to reduce operating costs, become more competitive in the market and achieve the objectives of survival, growth and making profits.Therefore, relating to current situation and trend of development in China's auto industry, a study which will benefit the auto enterprises'practices on the theories and practices of tax planning in ralation to the industry and enriching the study of tax planning for different industries in China are the goals of this paper.With the method of combining theoretical study and case analysis, this paper has a full discussion of tax planning for auto industry. First, this paper introduces the general theories of tax planning, which mainly refer to the concept of tax planning, principles which tax planning must abide by, and risk management of tax planning.Then, the paper narrates concisely the characteristics of auto industry, current situation of the industry in China and the potential strategies for development of automotive enterprises. The paper illustrates necessity and feasibility of carrying out tax planning systematically in Chinese automotive enterprises, considering features of current tax policies in the industry and the level of tax burdens which the auto enterprises have to shoulder.According to the characteristics of auto manufacturing enterprises, potential strategies and recent tax policies, the paper discusses the space of tax planning in auto industry and makes a summary of eight techniques of tax planning which the enterprises can turn to account. In the specific planning, This paper elaborates on some tax planning issues related to added-value tax, consumption tax, business tax, business income tax, personal income tax, M&A, and international operation with cases study.