Tax Planning In Enterprise Financing Decision

Successful companies are often rational.

It not only knows how to make profits by virtue of wisdom, but also knows how to avoid tax by virtue of wisdom.

In the modern "small profits but quick turnover" buyer's market environment, tax planning has become an important focus of modern enterprise financial management.

China has joined the WTO. With the further development of China's market economy, enterprises have become independent accounting entities and legal subjects.

Under the background of global economic integration, with the pursuit of profit, rationalization and autonomy of corporate behavior, tax planning has become the right of every tax payer.

In the face of fierce market competition at home and abroad, enterprises must occupy market share and become bigger and stronger so as to maintain their competitiveness.

Compared with the tax planning which has been prevalent in western countries, the tax planning of our enterprises is still very immature.

It is undoubtedly a question for every rational economic man to think about and how to make tax planning in a reasonable and lawful way in Chinese enterprises.

China's enterprises should learn to plan and lighten the tax burden within the scope permitted by law or without violating the provisions of the tax law, so as to maximize the wealth of enterprises.

Financing decision is a problem that any enterprise needs to face. It is also one of the key problems for the survival and development of enterprises.

Corporate financing is mainly to meet the needs of investment and capital utilization. According to the different sources of capital, the fund-raising activities can be divided into equity financing and debt financing, thus forming different capital structure of enterprises, resulting in different capital costs and financial risks.

The application of tax planning in raising funds is to rationally arrange the proportion of equity capital and debt capital and form the optimal capital structure.

In the process of financing, enterprises should consider the following aspects:

1, financing activities for enterprises

Influence.

2, the impact of changes in capital structure on tax costs and corporate profits.

3, the choice of financing mode has an impact on optimizing the capital structure and reducing tax burden on the maximum profits of enterprises and owners after tax.

An enterprise can raise its own funds by means of direct investment, stock issuance and retained earnings. Although the risk is small, dividends paid and dividends paid in the post tax profits can not play a role in reducing the income tax, and the cost of enterprise funds is high.

If debt is raised through raising funds to banks or other financial institutions or issuing bonds, the interest paid can be included in the cost before tax, thereby reducing the pre tax profits of enterprises and enabling enterprises to get tax saving benefits.

However, the higher debt ratio will affect the future financing cost and financial risk, so the higher the debt ratio is, the better.

The leverage of long-term debt financing is reflected in improving the return on equity capital and earnings per share of common stock, which can be reflected from the following formula:

Equity capital yield (pre tax) = pre tax investment yield + debt / equity capital (pre tax investment yield - debt cost ratio). Therefore, as long as the pre tax investment yield of enterprises is higher than the debt cost rate, increasing the debt limit and raising the proportion of liabilities will bring the effect of the increase in the rate of return on equity capital.

However, the effect of the increase of the equity capital yield will be offset by the gradual increase of the financial risk and the risk cost of the financing. When the two reaches a general balance, it will reach the maximum limit of increasing the debt ratio. Beyond this limit, the financial risk and the cost of financing risk will exceed the increase of the equity capital yield, and it will also reduce the profit after tax and reduce the return on equity capital.

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According to the current enterprise income tax policy, the actual expenses related to the company's income, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating the taxable income.

The reasonable and non capitalized borrowing cost that the enterprise has in the production and operation activities will be deducted.

If a company borrows money for the purchase, construction of fixed assets, intangible assets and inventory that has been built for a period of more than 12 months to reach a predetermined sale state, the reasonable borrowing cost arising from the purchase and construction of the relevant assets shall be included as capital expenditure into the cost of the relevant assets and shall be deducted in accordance with the regulations on the implementation of the enterprise income tax law of the People's Republic of China.

The following interest expenses arising from the production and operation of an enterprise are deducted:

1, interest payments from non-financial enterprises to financial enterprises, interest on savings deposits and interest payments from interbank loans, and interest payments issued by enterprises.

2, interest payments from non-financial enterprises to non-financial enterprises should not exceed the amount calculated according to the same loan interest rate of the same period of financial enterprises.

Therefore, the general operating loans or the interest on mobile loans can be deducted directly, but there is a certain upper limit, and the excess can not be deducted.

Specialized loans, that is, interest on fixed assets, can not be deducted directly, and can only be depreciated together with fixed assets, but there is no deductible limit.

Taxpayers can make full use of this provision for tax planning, and convert the interest of general operating loans that can not be deducted into fixed assets interest.

Also known as financial leasing, it is a long-term lease that the lessee gives to the lessor a formal application, which is introduced by the lessor to the lessee, and then rented to the lessee.

In this way, the leased enterprise can quickly acquire the necessary equipment by paying rent, without taking the risk of being eliminated.

For the leased fixed assets, the enterprise can depreciate it as its own fixed assets and depreciate it into the cost, and the rental cost is also allowed to be deducted before tax, so that the enterprise tax base will be reduced, so that the income tax will be paid less.

At the same time, the improvement expenditure in the use of fixed assets of financial leasing can also be amortized as a deferred asset within a period of not less than 5 years.

It can be seen that financial leasing is an important way of financing for enterprises, and its tax credit function is obvious.

It can be seen that financing plays a very important role in the production and operation of enterprises. Financing is a prerequisite for a series of production and operation activities of enterprises. The quality of financing decisions directly affects the performance of enterprise production and operation.

Reasonable tax planning for financing is beneficial not only to taxpayers, but also to the state.

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