Corporate finance decision-making tax planning

Abstract: This book is based on the new Enterprise Income Tax Law in 2008 after the implementation of tax policy, described in the financing decision in tax planning. Allow enterprises to more effectively integrate resources, increase their competitiveness.

Keywords:: finance, tax planning, cost.

Modern enterprises benefit tax planning to maximize their financial objectives, not against the Law under the premise of business should be from financing activities, investing activities and business activities in areas such as tax planning, in order to achieve the maximization of corporate wealth. Successful business often the reason for the taxpayer, by virtue of their wisdom not only know how to make a profit, even with the wisdom to know how reasonable tax avoidance. in the modern "puerile" buyer's market environment, tax planning has become an important modern corporate finance focus .

China has joined the WTO, with the further development of China's market economy, enterprises have become an independent business and legal entity accounting entity. In the context of global economic integration, with the profit-driven enterprise behavior, rationalization and autonomy, Tax planning should be the main interests of each tax. the face of intense domestic and international market competition, enterprises must capture the market share, bigger and stronger, to sustain their competitiveness. relative to western countries have already prevalent tax planning, China corporate tax planning is still immature. How China's enterprises to carry out reasonable and legitimate tax planning, is no doubt that every rational person must think and economic problems. China's enterprises should learn to the extent permitted by Law or in tax Law does not violate Subject to the provisions rational planning, reduce the tax burden in order to achieve a corporate wealth maximization.

First, the financing decision of the tax planning.

Financing decision for any business needs to face the issue, but also the survival and development of one of the key issues. Corporate finance mainly to meet the needs of investment and the use of capital, according to the different sources of funds can be classified as equity financing business capital financing and debt capital financing, to form companies of different capital structure, resulting in cost of funds of enterprises and financial risks are different. in the use of funding in tax planning, equity capital is a reasonable arrangement and the ratio of debt capital, form the optimal capital structure . enterprises in the financing process should consider the following aspects:

1, the financing for the corporate capital structure.

2, changes in capital structure and corporate profits for the taxation of costs.

3, the choice of financing in the optimization of capital structure and reduce the tax aspects of after-tax profits for the companies and owners to maximize the impact.

Absorption of direct investment enterprises, issuing shares, retained earnings and other equity ways to raise its own funds, although the risk is small, but this paid dividends, bonuses and profits after tax payment, can not play the role of tax credits, enterprise funds costly. If financing through the debt to banks and other financial institutions through loans or issue bonds to raise funds to pay the interest may be included in the pre-tax costs, which offset pre-tax profit of enterprises so that enterprises receive tax saving benefits. but because of liability a corresponding increase in the proportion of future financing costs and financial risk, therefore, is not the debt ratio the higher the better. leverage the financing of long-term liabilities reflected in the increased rate of return of equity capital and the amount of ordinary shares in terms of earnings per share, which can be reflected from the following formula:

Interest return on capital (pre-tax investment yield = EBIT + Debt / Equity Capital �� (pre-tax investment yield rate - cost of debt rate, therefore, investment income as long as the corporate income tax rate higher than the cost of debt, debt limit increase to improve the debt equity ratio of return on capital increase will bring the effect. However, this interest will be the effect of return on capital to improve the financial risk and cost of risk financing offset by the gradual increase, when the two reached a In general the balance, will increase the debt ratio has reached the maximum, over this limit, the risk of financial risk and cost of financing over equity return on capital will increase revenue, but also will reduce overall after-tax profit thereby reducing the interest return on capital. [Research Papers Download hi138.com]

Second, interest on borrowing costs of tax planning.

Under the current corporate income tax policy, corporate income actually incurred and to obtain relevant and reasonable expenses including costs, expenses, taxes, losses and other expenses permitted to be deducted from taxable income. Enterprises in production and business activities in the reasonable that do not require capitalization of borrowing costs, may be deducted. enterprises for the acquisition, construction of fixed assets, intangible assets and after 12 months of construction to achieve the intended sale, stock borrowing occurred in the asset purchase, during the construction reasonable borrowing costs, capital expenditures should be included as the cost of the asset, and in accordance with <<the PRC Enterprise Income Tax Law Implementation Regulations>> the provisions of deduction.

Enterprises in the production and business activities occurring in the following interest payments are deductible:

1, non-financial corporate interest paid on borrowings from financial companies, financial companies and interbank deposits in interest expense, corporate interest payments on bonds issued by the approval.

2, non-financial corporate borrowers to interest payments on non-financial enterprises, financial institutions do not exceed their lending rates over the same period the amount of similar parts.

Therefore, the general operational flow of the borrower or the borrower can deduct the interest, but there is a certain limit, more than some can not be deducted. Special interest loan that is not directly fixed assets, net of loans, can only join with the depreciation of fixed assets, but No deduction limit. the taxpayer can take full advantage of this provision for tax planning, the general will can not deduct interest on operating loans into a fixed interest assets.

Third, the finance lease tax planning.

Finance leases, also known as a finance lease, the lessor by the lessee to make a formal application for facilities capital to the lessee by the lessor the required equipment and then leased to the lessee the use of a long-term lease.

In this way, leasing companies can quickly get through the payment of rent the necessary equipment, do not take the risk of equipment to be eliminated. Of the leased fixed assets, enterprises can be treated as owned fixed assets, depreciation, depreciation included in cost costs, and pay the rental costs also allow the tax deduction reduces the tax base to enable enterprises to pay less income tax. Meanwhile, the finance lease of fixed assets occurred during the improvement of using expenditures as deferred assets in not less was amortized over 5 years. seen as a business major finance lease financing, the tax credit role is obvious.

Thus, financing the process of production and management in the enterprise occupies a very important position, financing, production and business activities of enterprises a prerequisite for financing decisions will directly affect the performance of the enterprise production and management. For the reasonable financing tax planning, not only for taxpayers and good for the country is also beneficial. [paper format]

References:

[1] over the earth. Tax Planning Theory and Practice (first edition [M]. Northeast University of Finance Press. 2005, (01.

[2] Wang Fengjuan. Tax accounting [M]. Fudan University Press, 2008, (04