Economic and social aspects of business and entrepreneurship

Tax planning and some aspects of tax accounting policy

Authors: Manakova E. V.

Abstract

Reforming the tax administration is one of the public policy priorities. The lack of definitions formalized in legislation is one of the issues of tax administration, which is why the terms tax administration and tax surveillance are specified in this article. The task of the company’s chief executive is not only to observe the tax laws but also to use the funds efficiently which is why the tax planning is required. It is important to properly draw up the tax budget at the strategic tax planning stage including one of such documents as the tax accounting policy. Reserves are one of the components of the tax accounting policy. It is a right but not an obligation of a taxpayer to establish reserves for the purposes of the tax accounting. The article shows which types of costs are affected by: a reserve for doubtful debts, a reserve for the warranty repair upcoming costs and warranty services, a reserve for repair of fixed assets, a reserve for vacations and annual long-service awards. The organizations should also consider the opportunities to use the benefits provided for by the applicable laws when planning some significant investments in the non-current assets. The options for the fixed-asset values recognizing within the costs using the bonus depreciation and the investment tax credit have been considered. The administration of the tax bases categorized into the tax groups is implemented at the stage of the short-term tax planning. The case of the salary growth shows the shift in the insurance premium amounts paid to the payroll fund and in the corporate profit tax. The efficiency of the tax planning is to be controlled at the final stage by comparing the actual data with the target indicators.

Key Words

tax administration, tax control, strategic tax planning, operational tax planning, reserves, depreciation premium, investment tax deduction, taxes, accounting policy, fixed assets