Tax Optimization Research Articles

Tax Optimization in the Context of the Grey Economy

Tax Optimization in the Context of the Grey Economy

Transformation of Traditional Corporate Tax Planning into AI-Driven Corporate Tax Planning

Corporate tax planning has traditionally relied on manual processes and expert judgment to minimize tax liabilities. However, the rise of artificial intelligence (AI) presents new opportunities to transform these practices through automation, real-time analysis, and predictive capabilities. To conduct this research, a comprehensive review of academic literature, case studies, and existing AI tools in tax planning was carried out. The proposed AI-based tax planning model was developed based on these findings and validated through simulations and expert feedback. The study also examined the process of integrating AI systems with existing corporate tax structures to assess the feasibility and effectiveness of implementation. Results show that AI-driven corporate tax planning significantly enhances accuracy and efficiency compared to traditional methods. The AI model provides real-time analysis and predictive insights, enabling businesses to optimize tax strategies while ensuring compliance with evolving regulations. Tax authorities also benefit from AI implementation, gaining more transparent and equitable tax structures, along with stronger supervision capabilities. The proposed model can be developed into customized software tailored to individual companies, seamlessly integrating with existing corporate systems. These findings indicate that AI has the potential to revolutionize corporate tax planning by streamlining tax management and optimizing outcomes. For businesses, AI enables personalized tax strategies that adapt to specific data and regulations, improving both compliance and long-term tax optimization.

Current paths of tax for business entities: Financial, economic and legal aspects

The article aims to investigate the ways of optimizing taxation for business entities in Ukraine to enhance the efficiency of the domestic taxation system and analyze the economic and legal aspects of establishing a new model of relations between businesses and fiscal authorities in alignment with European tax standards. The authors examine the economic and legal dimensions of current trends in tax optimization for profits generated from business activities, value-added goods and services, transactions involving excisable goods, as well as taxation on various forms of income, property, and property rights of business entities. Legislative improvements related to taxation and financial mechanisms for determining and collecting specific taxes, such as income tax and a single tax, are discussed. This study addresses the pressing issues surrounding legislative provisions on business entity taxation and proposes methods for enhancing tax optimization strategies within each entity. The authors emphasize the significance of developing a tailored tax policy for businesses to manage financial stability, guide economic activities, and ensure compliance with tax obligations. The authors present applicable recommendations for optimizing taxation practices and enhancing financial mechanisms for tax assessment and collection within business entities. Their insights shed light on the importance of strategic tax policy development to navigate tax responsibilities and plan for future financial obligations effectively. This research provides practical recommendations for policymakers and business leaders to improve tax optimization strategies, ensuring that businesses can operate efficiently while fulfilling their tax obligations in a manner that aligns with European standards.

Tax Optimization of Starred Hotels as an Effort Increasing Regional Original Income in the District West Manggarai

This research aims to examine the inhibiting factors in optimizing star hotel tax on local revenue and analyze the efforts and strategies undertaken so that star hotel tax collection increases and runs optimally. This research is a qualitative descriptive study. Data was collected through interviews and strengthened by literature study. The results of the research show that there are obstacles in optimizing star hotel taxes in increasing local revenue, namely limited human resources from the West Manggarai Regency Regional Revenue Agency, both as bailiffs, appraisers and inspectors, then there is still non-compliance by star hotel taxpayers in paying and reporting the tax. The existence of these obstacles means that efforts need to be made, including: improving the quality of tax collectors, coordinating with related agencies, socializing regional regulations to taxpayers regarding star hotel taxes, and intensifying tax assessments and inspections of star hotel tax objects. Researchers also recommend strategies for optimizing star hotel taxes to increase local revenue, including: expanding the revenue base, increasing supervision, and increasing the quality and quantity of employees at the West Manggarai Regency Regional Revenue Agency.

"Tax optimization" and its difference from "tax planning"

The article clarifies the content and relationship between the concepts of «tax optimization» and «tax planning». The criteria for distinguishing these concepts are determined. It is established that tax planning is a multi­stage process which includes both strategic forecasting and careful organization of tax liabilities at each level of business. The main goal of this process is to be able to shape the structure and form of the business in such a way that they are optimal from the taxation point of view. Tax planning primarily determines the choice of a business entity’s strategy. Tax planning is defined as an important element of a company’s strategic management aimed at long-term and comprehensive management of tax liabilities. Tax optimization is an important process aimed at adapting the taxpayer to the peculiarities of the current tax system in order to choose the most profitable and efficient taxation regime. This process is not limited to the passive application of tax rules, but involves the active management of tax liabilities within the limits of legally permissible techniques, means and methods. Tax optimization is not only the ability to choose the most favorable conditions from those offered by the legislator, but also the ability to predict and adapt to changes that may affect the tax burden in the future. Tax optimization as a legal tool for reducing the total tax burden is considered exclusively within the framework of legal actions of the taxpayer. A distinctive feature of tax optimization as compared to tax planning is its focus on achieving short- and medium-term goals of a business entity by directly using the opportunities provided by tax legislation. Tax planning, on the other hand, is an element of strategic management aimed at achieving the long-term strategic goals of a business entity. Tax optimization is aimed at developing the most favorable model for fulfilling tax obligations by a business entity without changing the economic substance of business transactions. This approach allows the taxpayer to flexibly adapt to changes in the tax environment, while maintaining the sustainability of financial results and reducing tax costs. Tax optimization is not just a tool for reducing the tax burden, but also an important element of tax planning.

An Analysis of the Relationship between the Accounting Information System and the Tax Optimization of SMES in the Manufacturing Sector in Côte d’Ivoire

An Analysis of the Relationship between the Accounting Information System and the Tax Optimization of SMES in the Manufacturing Sector in Côte d’Ivoire

ҚАЗАҚСТАНДАҒЫ КОРПОРАТИВТІК ТАБЫС САЛЫҒЫННЫҢ ЕРЕКШЕЛІКТЕРІ

The relevance of the article is that today one of the fundamentally important problems is to strengthen the financial system and ensure the entry of the national economy of Kazakhstan into the trajectory of sustainable socio-economic development. The priority issues of modern economic policy are the formation of an effective taxation system in Kazakhstan. It is determined by the fact that tax planning contributes to the optimization of taxes and payments in accordance with the tax code of the Republic of Kazakhstan. Modernization of tax obligations is measures of business entities aimed at reducing taxes and payments, taking into account benefits and provisions in accordance with the tax code of the Republic of Kazakhstan. Tax planning is aimed at solving problems such as increasing income and reducing tax liabilities. It is aimed at optimizing taxes and payments by enterprises, opening accounting documents and tax reports for tax structures. To do this, business entities use tax planning, which provides for tax incentives based on the use of benefits in accordance with tax legislation. In general, modernization is any activity aimed at improving the overall situation. In the tax part, optimization involves a combination of tax indicators and, on their basis, improving the calculation of tax liabilities and snow-year conditions of enterprises. One of the tools for optimizing taxes and payments, as well as tax planning, is the development of a tax accounting policy. The tax policy discloses all the tax features of the company, and also provides for the disclosure of tax documents. The article also outlines the types of tax planning – strategic and tactical characteristics. Strategic tax planning is being developed to modernize long-term taxes and payments. The development of a plan of the current reporting time for specific types of taxes and payments implies a set of measures of tactical tax planning. It was noted that the main goal of tax planning is to improve tax liabilities and increase the efficiency of enterprises.

Cooperative Compliance in Poland: The Question of Equality

An increasing number of tax jurisdictions are implementing the concept of cooperative compliance into their tax systems. It aims to improve tax compliance by building an enhanced relationship between tax authorities and taxpayers. In principle, the programme is aimed at large taxpayers capable of engaging in aggressive tax optimization that is detrimental to state revenue. Dedicating the programme exclusively to large taxpayers may raise doubts about whether it violates the principle of equality before the law. In Poland, the legislation governing the cooperative compliance programme was introduced on July 1, 2020. As in other countries, it was targeted at large taxpayers. The article therefore discusses the question whether the Polish legal regulations on cooperative tax compliance are in line with the constitutional principle of equality.

Impact of tax benefits on Peruvian companies' financial results

This study investigates how tax benefits influence corporate profitability in companies in Chachapoyas, Peru, emphasising the importance of proper fiscal management to improve financial performance. The relevance of tax incentives in profitability management is discussed, and challenges associated with legislative uncertainty and the lack of tax training are examined, which limit efficiency in resource management and the optimisation of financial assets. Using a quantitative approach, financial and tax data are analysed to examine the relationship between tax benefits and corporate profitability in a natural context, employing descriptive and inferential analysis techniques with SPSS software. The findings indicate a significantly positive correlation between tax benefits and profitability, demonstrating that tax optimisation can support sustainable economic growth for businesses. A deficiency in the knowledge and application of efficient tax strategies is identified. The study highlights the need for educational and tax optimisation programmes to improve tax management in businesses, which can contribute to a broader tax base and greater state capacity to finance essential public services. The article provides an applied and strategic perspective on fiscal and economic management, offering valuable implications for public policy formulation and corporate decision-making, and highlighting the importance of a holistic approach that integrates fiscal, financial, and corporate management.

Taxation models for international groups of companies

Taxation of international groups of companies can be based on two models: These are: 1) unitary taxation, whichinvolves determining the income of the group as a whole and then dividing it between individual companies, 2)separate entity taxation, which involves each entity being taken into account separately and its income beingdetermined as if it were an independent entity. In practice, it was decided to choose separate entity taxation, whichresulted in legislation on transfer pricing. However, using this model did not protect against tax optimization usedby international groups of companies, which prompted the OECD and the EU to take various actions to combat it.The latest initiative in the area of taxation of international groups of companies is the global minimum tax model.Its essence comes down to charging an additional amount of tax if the effective tax rate in a given tax jurisdictionis lower than 15%. In Poland, this model has not yet been implemented, it will most likely happen from 2025, hencethe lack of practical experience with its application

Local Tax Optimization Strategy In Jambi City: A Literature Review

This scientific paper seeks to evaluate the ability of local taxation as a source of income, the level of tax participation and the efficiency of the tax collection mechanism in Jambi City budget 2018-2022. The analytical methodology used in this research includes descriptive and qualitative approaches. Descriptive analysis incorporates computational methods that are illustrated in the form of numerical data, tabulations, and graphical representations. In the meantime, the qualitative aspects include conducting intense interviews that are analyzed using SWOT. Based on the findings from the analysis of local tax effectiveness covering from 2011 to 2023, it reveals that the efficiency of local taxation shows variability in different years. Based on existing literature and comparisons between studies that have been conducted, tax optimization can be carried out in Jambi City in line with the principle of fiscal decentralization in regional autonomy by enforcing regulations to ensure the creation of sustainable development and economic growth. Some of the things that can be done are increasing tax compliance, digitalization and simplifying the tax structure. This discussion produces input to the Jambi City Government to explore the potential of local revenue, which influences the growth of Regional Own-Source Revenue (PAD). Therefore, optimal development can lead to positive outcomes for the community, such as the economic growth of people in Jambi City and the optimization of tax revenue.

Tax Optimization of Active Strategies: Moving beyond Direct Indexing

Tax Optimization of Active Strategies: Moving beyond Direct Indexing

Innovative approaches to optimizing taxation in organizations

In conditions of rapid progress in technology and constant changes in tax legislation, the task of optimizing the taxation in organizations is becoming increasingly difficult for business entities. The use of innovative approaches in the process allows to increase efficiency and reduce tax expenses. In addition, innovative methods and technologies implementation can reduce time for tax optimization, simplify tax reporting monitoring and analysis, and improve decisions quality. The purpose of the study is to find innovative approaches to optimize taxation in organizations. The following tasks have been set: to classify the types of tax risks; to assess tax risks on the basis of determining the tax burden of organizations; to form innovative approaches to optimize taxation in organizations. As a result of the conducted research on the example of Technoprom the organizations are offered to determine the tax burden and forecast its dynamics in the future, as well as to apply innovative approaches to optimize taxation on the basis of artificial intelligence through the use of methods of automating tax accounting and reporting and blockchain technology. System approach, analysis and synthesis, as well as the method of expert evaluations method have been applied as the research methods.

Transfer Pricing in the Post-BEPS Era: the BEPS Package, as a Tool in Helping Tax Authorities Prevent Aggressive Tax Optimization in a Specific Sector. Case Study: the IT Industry in Romania

Abstract The debate regarding the willingness of enterprises to use transfer pricing for tax optimization is one with significant history (the first OECD report on transfer pricing dates from 1979). In the last fifteen years, this topic gained great traction as globalization became a key word in all economic undertakings. In 2013 the OECD/G20 officially launched the BEPS project, aimed at identifying and closing any loopholes present in the taxation system used by companies to optimize their tax burden. The work was finalized in 2015 by issuing the BEPS Package. However, the fight against base erosion and profit shifting did not end, as the OECD/G20 periodically monitors how the measures are implemented. Considering the importance of the IT sector in Romania, it is significant to investigate if the BEPS Package is an efficient tool in helping Romanian tax authorities prevent aggressive tax optimization in this industry. To provide a tentative answer, a statistical analysis was performed, aimed at comparing the profitability of related and non-related Romanian IT companies. Although the BEPS Package is not the only factor influencing the behavior of taxpayers, the work of OECD/G20 is one of the main forces shaping the Romanian taxation environment. Following the analysis, no significant differences were identified between the profitability of related and non-related companies, leading to the conclusion that local taxpayers are not inclined to engage in aggressive tax optimization, which is also a consequence of the way in which the legislation was drafted, influenced by the BEPS Package.

Tax control as a tool to curb the shadow economy

Subject. Numerous scientific works in the field of tax administration are devoted to the problems of tax regulation, the imperfections of current tax legislation, as well as the identification of the causes of the functioning of the shadow economy and ways of tax evasion. However, the issues of economic security of the state and tax control in its provision have been little studied today, despite the entry into force in the legal field more than six years ago of the Decree of the President of Russia dated May 13, 2017 No. 208 "On the Strategy of Economic Security of the Russian Federation for the period up to 2030". Thus, the object of the study is tax control, the subject is the effectiveness of on–site tax control as a factor in identifying and suppressing shadow activities in order to ensure the economic security of the country and its public legal entities. Purposes. To summarize approaches to the definition of the term "shadow economy", to distinguish methods for identifying factors of business fragmentation and optimizing the tax burden. Based on the data obtained, we propose an approach to the tax administration process that allows us to quickly respond to "risk signals" in the process of selecting candidates for tax control measures and further conducting tax audits, with a high probability of their effectiveness.Relevance. Tax control is an important regulator of the economic security of the state. The issues of its improvement in order to increase its efficiency and effectiveness have been important at all times. Currently, issues related to the shadow economy are one of the urgent problems affecting the economic development of the country and the functioning of tax systems. Understanding the term "shadow economy" and developing effective counteraction methods are important for tax authorities and society as a whole.Methodology. In the existing conditions of the study, the analysis of the database of tax authorities is carried out (without providing information about taxpayers), the analysis of judicial practice, and methods of logical and statistical analysis are also used. Thus, in the course of the study, the works of foreign and domestic authors were analyzed in order to study the terms "shadow economy" and "business fragmentation". The data of statistical reporting of tax authorities are analyzed, the dynamics of efficiency and effectiveness of on-site tax control are analyzed. The arbitration practice of court cases on the application of business fragmentation schemes by taxpayers has been studied and analyzed, which made it possible to identify a number of distinctive features of business fragmentation from its optimization in order to ensure the sustainable development of organizations (taxpayers) and, based on these indicators, propose a methodology for identifying tax evasion schemes in order to select candidates for on-site tax control.Conclusions. The conducted research allows us to develop the theoretical aspects of such concepts as "shadow economy" and "business fragmentation". Having analyzed the works of domestic and foreign researchers, the author substantiates his definition of the concept of "business fragmentation". The author provides a system of the most significant indicators that can be fully taken as the basis for risk benchmarks signaling the use of fictitious tax optimization schemes by the taxpayer.

Учетная политика как основной инструмент оптимизации налоговых платежей в компаниях агрохолдинга

The features of taxation of agricultural enterprises are considered. The characteristic features of an agricultural holding as an object of taxation are listed. The necessity of tax optimization in the companies forming it is justified. The possibilities of accounting policy from the point of view of tax optimization are considered. It is proposed to improve the methodological elements of accounting policy for the purposes of tax optimization of agricultural holding companies.

Outbound Profit Shifting and the Propensity to Engage in Cross‐Border Acquisitions

AbstractAccountability‐avoiding foreign direct investment (FDI) is a category of financial motives explaining where firms invest and how, yet our grasp of this phenomenon is incomplete. In contrast with tax‐haven FDI, where multinational enterprises (MNEs) invest in a host country to pursue inbound profit shifting, we consider a novel motive – FDI attracted by low host country financial transparency that enables outbound profit shifting (OPS). Cross‐border acquisitions (CBAs) are a takeover route to achieving OPS and global tax optimization. Our empirical context is 39,951 CBAs by 315 acquirers from 26 countries in the 1996–2015 period. We hypothesize and empirically show a positive relationship between OPS and CBAs and the probability that equity ownership of CBAs will be high. We find that the relationship between OPS and CBAs is stronger the more attractive or income unequal the host market, or when the multinational's industry is vertically or horizontally integrated. We attribute the lack of support for our hypothesis that MNEs require in‐house capability to conduct OPS to tax planning consultancies’ services. These findings highlight the role of low financial transparency as a novel locational determinant of OPS‐pursuing FDI and emphasize the distinction between inbound and outbound profit shifting as manifestations of accountability‐avoiding FDI.

WEALTH WHISPERERS: A Financial LLM

In an era of continually evolving financial markets, the demand for sophisticated financial advisory models tailored to the unique landscape of the Indian market is more prominent than ever before. This Paper offers a comprehensive model designed to address the nuances and complexities of the Indian financial ecosystem, empowering financial advisors with a culturally relevant and powerful toolset to effectively serve their clients. The Financial Advisory LLM Model, customized specifically for the Indian market, seamlessly integrates Legal, Financial, and Management (LLM) expertise into a unified and cohesive platform. Leveraging cutting-edge technologies such as artificial intelligence and machine learning, this model significantly enhances the advisory process, making it more efficient and precise. This project report delves into the extensive range of solutions provided by the Financial Advisory LLM Model, specifically tailored to address various financial challenges within the Indian context. These solutions encompass areas such as investment management, wealth preservation, and tax optimization. By incorporating these elements into the model, the report aims to empower financial advisors to meet the diverse needs of their clients effectively and efficiently. Key Words: Financial Advisory LLM Model, Indian financial ecosystem, Artificial intelligence and machine learning, Cutting-edge technologies, Financial technology (FinTech), Investment management

Tax optimisation in the tax risk management process. Tax-legal analysis and selected managerial issues

ObjectivesThe aim of the article is to theoretically present ways of legally optimising the taxation of entrepreneurs' income, by using the appropriate construction of legal regulations and legal and organisational forms of business. The issues of tax risk in the context of tax management are also presented. The goal of management is to reduce economic risk and to protect against its consequences.Material and methodsResearch in the social sciences, is inspired by numerous and diverse needs. Therefore, we will reduce the existing needs to two main types, to which certain types of research correspond. The first is combined with needs of a theoretical or cognitive nature, that is, it includes all those needs that are associated with the development of a particular science. The second is combined with the various needs of practice.ResultsIncome taxes also have a negative impact on the assets (equity) of entrepreneurs. The reduction in wealth results from the burdening of entrepreneurs with both wealth taxes and corporate income tax in the case of capital companies and, in the case of partnerships, with personal income tax for distributions made to partners.ConclusionsBoth of these risks describe a potential reality, i.e. the possibility of coming into conflict with the tax authorities. Their realisation is random, with the so-called double randomness - both the timing of the event (conflict) and its depth, i.e. the consequences, are unknown. These effects are mainly financial (arrears incurred, financial sanctions, etc.), although loss of credibility, for example, may also be involved. Importantly, both risks are linked to uncertainty, but each with a different one. Speculative risk is linked to the uncertainty of whether an illegal act will come to light.

VAT on Investment Silver and Its Distorting Effects

The aim of this article is to illustrate the distorting effect of asymmetrical VAT treatment using the example of silver taxation in Germany. The author presents the development of the VAT framework for investment silver and its consequences in the form of price effects and tax optimization. He argues in favour of the tax exemption for investment silver, which is currently limited to investment gold transactions.