Research On Effective Tax Planning Of Small And Medium-sized Enterprises In China

With the deeply development of reform and opening and the continuous developmentof market economy, both the number and the scale of the small and medium-sizedenterprises have developed rapidly. The small and medium-sized enterprises play asignificant role in solving the employment problems and promoting national economy.However, in recent years, owing to the rising cost, financing difficulties and other factors,the small and medium-sized enterprises are experiencing difficulties in operation, andmargins have been squeezed.There were many tax planning studies targeted to minimize tax burden in the earlystage, but fewer studying the cost, risk and income of tax planning from the strategicperspective. The effective tax planning which was put forward by Scholes in1992regardedtax planning as part of enterprises effective design and it fully considered non-tax costs,hidden taxes and other factors when using tax planning activities. It was developed andimproved compared with traditional tax planning. This thesis will use effective tax planningtheory to analyze tax planning of the small and medium-sized enterprises, research thecontent and method of the effective tax planning of the small and medium-sized enterprisesin China. The main research contents are as follows:First, explains concepts of small and medium-sized enterprises, effective tax planningand related theories. Through analyzing the present situation and features of the small andmedium-sized enterprises, this thesis gives the content and necessity of effective taxplanning of the small and medium-sized enterprises.Next, describes the method of effective tax planning of the small and medium-sizedenterprises in financing, investing, operating and allocation activities:1)analyzes how to usetax planning in financing activities mainly from the view of financing structure and financeleasing;2)offers guidance for the small and medium-sized enterprises to use effective taxplanning in investing activities, regarding the location, industry and form of businessorganization, combining with case analysis;3)In operating activities, uses the method of taxbalance and cash flow balance to design the value-added tax, considering the characteristicsof more flexible operating and the broader division interval of the small and medium-sizedenterprises; designs consumption tax by method of the choice of processing and methods ofpricing consumer goods; plans enterprise income tax using the choice of depreciationmethods, inventory valuation methods and tax preferential policies;4) in allocationactivities, mainly studies the choice of dividend distribution methods and researches staff salaries tax planning.Finally, based on the questionnaires results, analyses existed problems of tax planningin small and medium-sized enterprises and comes up with some suggestions.