Study On Legal Risks And Countermeasures Relating To Tax Planning In China

Tax is the specific distribution of fiscal revenue which used by the government to acquire the fiscal income compulsorily and free of charge with the reliance on the public power, to meet the social needs and perform the public function. Tax payer as an independently managed entity which is responsible for its own profits shall decrease tax payment, decrease the tax burden and obtain tax benefits in accordance with relevant laws. Tax planning appeared on the scene. Tax planning is used by the tax payer to plan production, operation, investment and asset management in accordance with the tax laws, in order to decrease tax burden with no tax related risks. Tax planning is a basic right for the tax payer and an optimal choice to decrease its tax burden and an inevitable choice under a market economy. In developed countries, tax planning is deeply rooted and mature both in theory and practice. With the development of market economy and awareness of law be deeply rooted in the people, tax planning caused attention from the academia and practice. However, studies on the tax planning are mainly from the angles of accounting, economics and management, and few from the angles of legal nature and legal risks. Tax planning and tax laws are closely connected. Basically speaking, tax planning is a legal tax avoidance method which is encouraged and promoted by the State. Inappropriate tax planning will easily trigger the legal risks, cause huge economic loss and be imposed with legal penalty. Thus the study on legal risks and countermeasures relating to tax planning is far reaching and meaningful in the practice.This article is to study legal risks and countermeasures relating to tax planning, including preamble, main body and conclusion. The main body includes four chapters. Chapter â…  discusses the basic principles of tax planning, including the definition, methods and legal risks of the tax planning, compares the differences between tax planning and tax avoidance, tax evasion, etc., and understands the essence of the tax planning. Chapter â…¡ compares the legislation of tax planning in China and abroad and learn from the advanced experience. Chapter â…¢ analyzes in depth the reason of legal risks relating to tax planning from the perspective from legislation and law enforcement, etc. Chapter â…¤ proposes suggestions to avoid legal risks and ensure a sound and rapid development of the tax planning in China.