The Research On Tax Risk Management Of H Group

Tax risk is the uncertainty of tax consequences resulting from enterprises’economic issues and government action. Tax risk management is an important part ofrisk management. H Group has several production and sales subsidiaries in mainlandas a large Hong Kong-listed paper group. Its acquisition among each subsidiary is ofmore complexes, having a large number of tax-related problems and leading to theformation of tax risks, and the related transactions acted as a fixed price billingbetween production and sale subsidiaries, which containing significant tax risks.The paper attempts to apply the tax risk management theory, analyze detailed thedaily operations, equity acquisitions, related party transactions and other tax risksfaced by H group, and proposed an constructed program of tax risk controlmechanisms in H group. So H group can set up a leading tax risk management strategyand establish a law-abiding and tax credit for tax risk management concepts. Theboard is the core of decision-making body to determine the tax risk managementstrategy and tax risk in major economic transactions. The ultimate controller honesttax payment to enhance the social image, the tax risk management section is the basisfor tax risk control mechanism, and the board and ultimate controller are the key tocontrol the acquisition tax risk, can be established to control tax risk and set atransparent price system of related transactions. Enterprises should set a transparentprice system of related transactions, combine tax and have a frank and open attitudetowards the tax authorities to cooperative control the tax risks to reduce the tax risk.The paper aimed at the large enterprise groups, especially which registeredoutside but the main economic activities in mainland China. As today the tax systembeing gradually improved and the tax regulation being increasingly tight, this studyhas a good practical reference value to improve the level of tax risk management oflarge enterprises including H group.