Counteracting Tax Evasion when Splitting a Production Process

Abstract

The subject of the research is processes of reducing tax payments using various tax schemes. The relevance of the problem is due to the fact that both legal and illegal tax schemes are used in the optimization of tax payments. In illegal tax schemes, huge financial resources are concealed from taxation, and, consequently, removed from control of supervisory bodies, which creates the prerequisites for abusing the financial security of the country. One of the ways to dodge taxes is to use various forms of reorganization of economic entities, in particular, splitting the production process. The purpose of the paper was to develop mechanisms for counteracting tax evasion when splitting a production process. The paper provides the author’s definition of the term “tax evasion” understood as the use of specially developed tax schemes for economic transactions performed with violation of the order of formation of individual taxation system elements making it possible to reduce the amount of tax payments to respective budgets. It is concluded that when the production process is split in parts, the main economic goal should be to optimize the current management staff expenses and improve the business process management efficiency.