On Overseas EPC Project Tax Risks Prevention

With the improvement of national tax law system, research on the prevention of enterprises tax risks has become more and more important. The enterprises tax risks refer to the tax behavior of enterprises who failed to comply with the provisions effectively of the tax law, which may led to the loss of enterprises future interests. Enterprises tax risks mainly includes two aspects, one aspect is that the enterprises tax behavior does not conform to the provisions of the tax laws and regulations which will arise the tax risks; the other aspect is that the management behavior of enterprises failed to make reasonable tax planning which make the enterprises paid more tax. Tax risks cannot be avoided, they always accompanied by the existence of the enterprises, but enterprises can adopt effective tax risks prevention strategies to reduce the tax risks. Under the fair market competition environment, enterprises tax risks prevention research play a crucial role for the sustainable development of enterprises, reasonable tax risks prevention strategies can increase the profits of enterprises effectively, while neglect the prevention of tax risks may lead to enterprises bankruptcy.With the economical globalization background and the national "One belt And One Road" policy, more and more Chinese enterprises go abroad for contracting overseas projects. In the course of the projects implementation, due to lack of experience and poor understanding on the foreign taxation system, which may increase tax risks occurrence, and this may cause great influence to the operation of enterprises and projects. This paper combined with the general tax risks theory, adopted tax risks analysis methods, by analysis detail tax risks about EPC projects bidding, execution, and closure, this paper make tax risks prevention strategies accordingly, which will help enterprises avoid or decrease the existence or the potential tax risks reasonably of overseas EPC projects. This paper takes the India EPC projects as an example to introduce the tax risks prevention experience, provide a set of effective overseas EPC projects tax risks prevention methods for the enterprises, helping the enterprises to increase revenue, reduce the losses.This paper taking the general research methods of tax risks combined with specific examples to produce a profound analysis of the tax risks causes and prevention strategies for overseas EPC projects, and through the analysis of literature this paper collated tax risks management strategy in relation to overseas EPC projects construction, Providing a theoretical basis to tax risks prevention research for overseas EPC projects construction. This paper takes the comparison of differences between taxes and tax rates of domestic and overseas and the tax preferential measures, also on the basis of reasonable avoidance of tax risks, as well as according to the contract of the enterprises benefit maximization principle to allocate the contracts price and make reasonable tax planning, this paper combined with the actual specific situation analysis the existence or potential tax risks of projects and propose the solutions, in order to provide some theoretical supports for the overseas EPC projects of tax risks management, and provide experience for the upcoming or have been "going out" enterprises. This paper combined the general theory of risks to introduce events tree analysis method, and the risks early warning level analysis theory to the enterprises tax risks analysis are the innovation points of this paper.