Corporate Tax Avoidance Techniques

Tax avoidance means that taxpayers take certain forms, methods and means within the scope permitted by law to avoid or reduce taxes.

Generally, there are three forms: legal, non illegal, formal and illegal.

The specific methods adopted by the company are as follows: first, pfer pricing: through the affiliated enterprises, the whole tax avoidance is avoided.

Transactions of products and services are not carried out at market prices. High tax rates are adopted in areas with high tax rates. Low tax rates are adopted in low tax rates to achieve overall tax avoidance.

There are even forms of billing companies in multinational enterprises.

Two, enterprise inventory valuation tax avoidance: the use of internal accounting methods and inventory market price changes, the use of high cost and low profit.

Three, depreciation: a depreciation method that is advantageous to enterprises in the way of tax law.

Four, asset amortization Law: to maximize the cost of intangible assets, deferred assets, low value consumables, packaging materials and materials, and minimize pre tax profits.

Five, financing lease law: to reduce profits and tax base by paying rent.

Six, trust means: through the establishment of trust institutions in preferential tax areas, let the property of non preferential areas be anchored in the trust institutions in preferential areas, and use tax preferential policies to avoid tax.

Seven, rely on tax avoidance: for example, in the areas of scientific research, welfare, education, and the old and the poor.

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