The term refers to the prior planning and arrangement of business, investment, financial management and other activities within the scope of the tax law.

1, the direct use of planning method

The state in order to achieve the overall economic goals, from the macroeconomic regulation of the economy, to guide the flow of resources, the formulation of many tax incentives. For taxpayers to use tax incentives for planning, the state is to support and encourage, because the more taxpayers use tax incentives, the more conducive to the realization of the country's specific policy objectives. Therefore, taxpayers can make use of the preferential policies for the production and operation activities of their own enterprises in an open and fair manner.

2. Location mobility planning method

Taxpayers can, according to their needs, either choose to register in the preferential areas, or transfer the production which is now less prosperous to the preferential areas, in order to fully enjoy the preferential tax policies, to reduce the tax burden of the enterprises, and to improve the economic efficiency of the enterprises.

3, create conditions planning method

Taxpayers to create conditions to make themselves in line with the provisions of the tax incentives or through the attachment in some of the enterprises or industries and trades that can enjoy preferential treatment, so that they meet the preferential conditions, so as to enjoy preferential treatment.

Expanded Information

The fundamental reason for any tax planning behavior is the driving force of economic interests, i.e., the economic subject's pursuit of maximizing its own economic interests. China's survey of a portion of state-owned enterprises, collective enterprises, and individual operators shows that the vast majority of enterprises have the desire and requirement to engage in production and business activities in special economic zones, development zones, and tax-preferential areas, the main reason being that the tax burden is lighter and the amount of tax paid is less.

Profit is equal to income minus cost (excluding tax) minus tax, in the case of income remains unchanged, reduce the cost of business or personal expenses and tax expenditures, you can get a greater economic returns. Obviously, taxes, as an expense item of production and business activities, should be the less the better, no matter how just and reasonable it is, it means a loss of direct economic interests of taxpayers.

Baidu Encyclopedia - Tax Planning

Baidu Encyclopedia - Tax Planning