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10TAX PLANNING. OPTIONS OF MANAGEMENT
Abstract
The paper deals with the concept "tax planning" from the position of various authors, the most significant risks of tax planning are allocated. The interrelation of tax planning with management accounting at the different levels of management is established. Elements of accounting policies for management accounting regarding optimization of tax payments are considered. The structure of the tax budget necessary for the correct tax planning in the organization is developed. The idea of interrelation of management of tax planning with system of management accounting is shown.
Keywords
tax planning, tax burden, optimization, management accounting, accounting policies for management accounting, tax budget, management of tax planning
AUTHORS
Tatyana Lesina Evgenia Emelyanova
PhD in Economics, Associate Professor PhD in Economics, Associate Professor
Russian Presidential Academy of National Russian Presidential Academy of National
Economy and Public Administration, Economy and Public Administration,
Kaluga, Russia Kaluga, Russia
jalesina@maH.ru evs15@mail.ru
For many economic entities, tax planning has to become the obligatory tool in a complex of financial management at adoption of administrative decisions both on tactical, and strategic levels. Management of strategic tasks and solution of administrative problems without tax consequences is irrational.
Tax planning is capable to become not only one of the most perspective instruments of management accounting, but also the factor operating on investment policy both on macro and microeconomic levels (Help system ...). Aspiration to introduce tax planning in practice of the Russian organizations is being traced within two decades, however results are represented unconvincing.
Development of effective strategic administrative decisions by the modern organization functioning in dynamically changing conditions of the market needs the solid and relevant data providing transparent vision of both factors of the internal environment of the organization and a wide range of external factors (Yemelyanov, 2015).
Use of the instruments of accounting and management accounting and forms of account, which are traditionally used in the domestic companies, promotes formation of a solid data about the facts of financial and economic activity of organization. However, such information does not allow to prove this or that administrative decision having a long-term strategic importance for the enterprise (Fateeva, Lesina, 2015).
Let's address to scientific definition of the concept "tax planning". J. Friedman defines tax planning as "the systematic analysis of various tax alternatives directed on minimization of tax obligations in current and future periods. How (together or separately) to hand over the reporting, when to sell assets and to pay pension accumulation, when to gain income and to pay expenses, when and in what size to make gifts and to acquire real estate — all this are the examples of tax planning" (Tax code of the Russian Federation).
J. Pepper defines tax planning as "the art to exempt the capital from taxes" (Vylkova, 2014).
Definitions of tax planning from position of domestic and foreign scientists have essential differences. Domestic authors unlike foreign ones, allocate tax planning from a position of legal decrease in the taxes paid by the organization to the budget (Vakhrushina, Sidorova, Borisov, 2011).
Let's note one more important vector of tax planning. It is directed not on decrease of tax payments, but, undoubtedly, on regulation and adoption of effective administrative decisions. Understating or optimization of tax payments do not always satisfies strategic objectives of business.
Experience of foreign companies showed that the thought-over tax planning promotes increasing level of the company's income, growth of its status for the state that is important for further development (Antonova, Nazarov, 2015).
As for the Russian practice of tax planning, it is necessary to remember that the main user of information is government bodies. In this regard, it is necessary to consider the recommendations presented in normative documents. In particular, in 2007, the Department of Federal Tax Service of Russia developed and approved the Concept of system of planning of exit tax audits (The order of FNS of Russia of 30.05.2007 of N MM-3-06/333 @ (an edition of 10.05.2012) "About the approval of the Concept of system of planning of exit tax audits"). The Concept was developed to increase tax discipline and literacy of taxpayers.
According to authors, the most significant criteria of risks assessment used by tax authorities in the course of selection of taxpayers for carrying out exit tax audits are generalized and given in table 1.
TABLE 1. CRITERIA (REFERENCE POINTS) OF TAX PLANNING
Criterion Note
1. Tax burden of the taxpayer is below average on economic entities in the concrete branch (the type of economic activity) Tax burden is calculated as a ratio of the sum of the paid taxes to a turn (revenue)
2. Reflection of losses throughout several tax periods in accounting or tax reports Financial and economic activity of organization is at a loss within two and more calendar years
3. Reflection of the considerable sums of tax deductions for a certain period in the tax reporting The share of deductions on a value added tax from the sum of the tax added from tax base is equal or exceeds 89% during 12 months
4. The advancing growth rate of expenses over growth rate of the income from realization of goods (works, services) There is a discrepancy of growth rates of expenses in comparison with growth rate of the income on income tax of the organization: data of the tax reporting do not coincide with data of financial statements
5. Considerable deviation of level of profitability (sales and/or assets) according to accounting from of profitability level for this field of activity on statistical data Regarding income tax of organizations, there is 10% or more deviation (towards reduction) in profitability according to accounting of the taxpayer from the industry average profitability on a similar kind of activity on statistical data
6. Conducting financial and economic activity with high tax risk Information on the most widespread ways of conducting financial and economic activity with heavy taxes, risks directed on obtaining unreasonable tax benefit is published on the website of Federal Tax Service of Russia (www.nalog.ru)
Questions of tax risks prevention have to be reference points for the planned indicators. The table shows the reduced list of criteria. The full list can be studied in the document "Concept of system of planning of exit tax audits" mentioned earlier.
Now there are following types of tax planning: classical tax planning, optimizing tax planning, illegal tax planning.
The organization itself chooses what type of tax planning to apply. However, each tax planning type has certain consequences. Especially it concerns illegal tax planning. It is necessary to be guided by further prospect of development of the organization (Sidorova, 2012).
Tax planning, as well as other administrative activity, includes expeditious functions, functions of control and actually planning function.
For our research, we allocate tactical and strategic levels of tax planning, as they are of the greatest interest.
At the tactical level, tax planning becomes part of the general system of financial management and control. Special preparation (planning) of contract schemes of standard, large and long-term economic contracts is made.
In particular, forecasts of organization's tax obligations and consequences of the planned schemes of transactions are formed. The schedule of compliance of execution of tax obligations and change of financial resources of the organization is developed. The possible reasons of sharp deviations from average indicators of activity of the organization and tax consequences of innovations or the carried-out transaction are predicted and investigated.
The events held at the current level of planning are called ways, methods, "schemes" of tax optimization. Ways of tax optimization are various by the nature and in the majority are narrowly targeted on a certain segment of the tax relations. They do not touch the whole complex of tax issues.
Besides, an important condition is drawing up accounting policies for management accounting. The accounting policies for management accounting are the key instrument of management and include the elements allowing to optimize lawfully a tax portfolio (Legal system "Guarantors").
It is defined by close, organic interrelation between tax planning and subsystem of management accounting.
The elements reflected in accounting policies for management accounting of the organization establish possible options of decrease in tax payments according to the legislation. Let us present the list of the most popular elements in table 2.
TABLE 2. THE ELEMENTS REFLECTED IN ACCOUNTING POLICIES FOR MANAGEMENT ACCOUNTING, PROMOTING OPTIMIZATION OF TAX PAYMENTS
№ The element reflected in accounting policies Option of accounting policies for management accounting
1 2 3
1 Methods of calculation of product cost Calculation of full prime cost (Absorption Costing) Calculation of incomplete prime cost (Direct Costing); Accounting of actual cost; Accounting of standard costs (Standard Costing); ABC - Costing Just in time FSA Target - Costing
Kaisen - Costing Process method Job order method Process method of cost accounting
2 Group of expenses Constants and variables. Conditional variables, conditional constants; The main and laid on; Relevant and irrelevant; Single-element and complex Direct and indirect, etc.
3 Way of assessment of material and production stocks at their leaving HIFO (assessment at the highest price of acquisition irrespective of acquisition terms); LOFO (assessment at the lowest price of acquisition irrespective of acquisition terms); On the prices of concern (on the prices of sale of material and production stocks in corporation); On the acquisition prices (on the actual price at the time of purchase); On the prices of day (on the price bought in day of acquisition); On the registration prices (on the average prices of purchase), etc.
* made by authors
Formation of the tax budget belongs to the strategic level of planning. Tax budget is intended for intra firm management, represents trade secret and is formed as required (once a month, quarter, year, etc.).
The structure of tax budget depends on a set of factors, such as size of the organization; kind of activity of the organization; taxation mode; the property of the organization; activity implementation places, etc. (Legal system "Guarantors").
Rather detailed budgets for each type of tax are formed in major companies. It is connected with large volume of information. The uniform tax budget, which includes all types of tax paid by the organization, is formed in the small and average organizations.
The example of tax budget for a small or average organization, applying the main system of the taxation (The official site ...) is presented in table 3.
TABLE 3. STRUCTURE OF THE TAX BUDGET FOR___QUARTER 20
No. Indicator Reference information _quarter 20_. _quarter 20_, total Rejection of the budget from the actual value The added penalties, penalty fee, etc. The reasons of deviations (the added sanctions)
The tax base interrelation with documents month month month
1 2 3 4 5 6 7 8 9 10 11
Thus, it is possible to draw a conclusion that management of tax planning is the perspective direction, which application is necessary for economic entities. It should be noted that the aim of the paper was to show theoretical and practical points of view to
prove tax planning, which represents the way of minimization of tax payments and the important administrative tool demanding performance of certain actions.
REFERENCES
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2. Vakhrushina M. A., Sidorova M. I., Borisov L.I. (2011) Strategic management accounting. Manual. - M.: Read of Groups, 2011
3. Vylkova E.S. (2014) Tax planning: theory and practice: the textbook for higher education institutions / Series: Bachelor./the 2nd prod. processed and added - M.: Publishing house of Yurayt, 2014. - 660 pages.
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5. Sidorova M. I. (2012) Accountant and tax accounting of the commercial organization: interaction models//Finance, money, investments. - M - 2012. - No. 3/2012 (43). - Page 29-33.
6. Fateeva T.N., Lesina T.V. (2015) Non-financial reporting as instrument of formation of positive image of the organization//Science of science Internet magazine. 2015. T. 7. No. 4. Page 52.
7. Help system "Theory and Practice of the Financial Account" - URL: www.gaap.ru - [Date of the address 29.11.2015].
8. The official site of the "Audit and Financial Analysis" magazine - URL: www.auditfin.com/- [Date of the address 09.12.2015].
9. Tax code of the Russian Federation (part one). The federal law from 31.07.1998g. No. 146-FZ (edition of 13.07.2015).
10. Legal system "Guarantors" / Taxes and fees, enlisted in the budget of the Kaluga region and budgets of the municipalities located in the territory of the Kaluga region, access - URL: http://base .garant.ru/15900110/-[Date of the address 07.12.2015].
