Tax Planning Scheme Design Of X Company's Ethiopia Railway Electrification Project

With the implementation of Chinese "going out" strategy,the number of international engineering companies in China has sprung up quickly and the pace of "going out" has been gradually accelerated.Although the number of companies stepping abroad to enter the field of international competition is increasing,compared with foreign developed countries,the phenomenon of low economic efficiency of these companies in the international market competition is widespread.Among the reasons for this phenomenon,tax issue occupies a large part.The concept of tax management in China is far from that in developed countries such as Europe and the United States.Therefore,for Chinese international engineering companies which are "going out",it is urgent to strengthen overseas tax risk management and carry out effective tax planning for international engineering projects.This paper mainly focuses on the tax planning of X Company Ethiopia-Djibouti Railways Power Supply Project,adopts the method of literature review,case analysis and inductive summary,takes the tax-related problems encountered in the implementation of the project as the research object,and analyzes the tax environment,tax-related risks and the necessity of tax planning of the project.By listing the principles,agreements,main tax types and basic planning methods of international taxation,this paper expounds the design ideas for tax planning of the project.According to the different stages and the actual situation of the project,different tax planning schemes are designed for each stage.In the bidding stage of the project,the establishment of branches and shortening the construction period can be used to avoid the high enterprise income tax in Ethiopia.In the commercial negotiation stage of the project,the use of tax consulting agencies and the division of the tax base can be used to avoid tax-related risks in Ethiopia and reduce the tax burden.In the implementation stage of the project,transfer pricing,maximum tax benefits,statutory deductions and percentage of completion method can be used to optimize tax burden and maximize economic benefits.It is finally concluded that effective tax planning can achieve obvious tax saving effect,avoid the tax-related risks of the project to the greatest extent,reduce the tax burden,and ultimately achieve the maximization of economic benefits.The tax planning of X Company Ethiopia-Djibouti Railways Power Supply Project has strong practicality and important application value.Although this paper takes the Ethiopia-DjiboutiRailways Power Supply Project of X company as the background for the tax planning scheme design,the planning ideas and specific methods have certain reference significance for other companies which have engineering projects in Ethiopia and other African countries.