Corporate Tax Risk Management Mechanism

Since 1970s, with the advantages of strong pertinence, high efficiency and low cost, the risk management has developed rapidly all over the world and formed an integrated theory system, and it was widely applied in managerial activities of the enterprises, the multinational groups, the financial field and the government. In recent years, there appeared numerous cases that the enterprises are failed in their operations for the sake of ignoring the tax risk, and some enterprises have taken lots of measures in control this kind of risk. With the establishment of modern enterprise system, the inner control systems of the enterprises are becoming perfect increasingly, the reasonable assessment and solution of the corporate tax risk began to show their importance on the strategic goals of the enterprises, and the control of tax risk has become an importance content of the inner risk control of the enterprises.The main object of this thesis is the corporate tax risk. Since the natural conflict between the inner impetus of the enterprises in pursuit of the maximum of the after-tax benefit and the compulsion and non-compensation of the taxation, the existence of tax risk has its objective inevitability. Therefore, it is very important to establish a tax risk assessment/control system for the enterprise. And on the other hand, nowadays the proprietors shall get rid of the traditional taxpaying concept and establish a new one that featured by following the law. And the core of this issue is to establish a systematic, intact and effective corporate tax risk management system. But, at present, there are few achievements on researching this kind of mechanism. So the author of this thesis hopes to make reference of the general principles and methods of the risk management, combine the characteristics of taxation and the existing revenue policies and discusses how to establish a risk control mechanism of the enterprise taxation based on concrete cases. And the train of thought is as the following:Firstly, we will analyze the concept of enterprise tax risk. The enterprise tax risk is a kind of taxpaying risk, which is connecting but not the same as the taxation risk of the tax authorities. The research on the corporate tax risk must combine with the taxation behaviors of the tax authorities. The revenue distribution is involved in all aspects of the enterprises and is very important to their operation. With the modernization of the tax authorities management and the enhancement of taxation check, the tax risk issue has attracted more and more attentions of the enterprises. It appears extremely important to the existence and development on how to avoid the tax risk of the enterprises. After the definition of the corporate tax risk has been made. Then we will make an analysis of it. From the considering of the origin of the tax risk, the tax risk is not uncontrollable. As an important component of the field of corporate risk control, the tax risk control shall make a reasonable use of the existing principles and methods, as well as combining the characteristics of the taxation itself, so as to form an integrated tax risk control mechanism as soon as possible. Therefore, we should try to preliminarily construct the tax risk control mechanism from the aspects of the tax risk assessment, the tax risk control and the tax risk strategies, etc. And, on this basis, we should describe and analyze the way of how to establish the tax risk management system, and hence to set up a solid theoretical foundation for the case analysis. Then, we will expatiate that the enterprises that need to start from the two aspects of taxpaying concept and the inner control system of taxation to control the tax risk, and the core is to establish a systematical, intact and effective corporate tax risk management system. In the face of the above tax risks derived from all aspects, we should take measures to reduce them to the minimum. Finally, We will establish the assessment model of the tax risk control based on the systematical analysis of real cases, and then conduct the viewpoint and the practical conclusion of this thesis.