Study on Small and Medium-sized Enterprises’ Tax Planning Based on the Theory of Corporate Life Cycle
|School||Jiangsu University of Science and Technology|
|Keywords||Small and medium-sized enterprises Corporate life-cycle Tax planning|
In China, tax planning is the sunrise industry, and people are becoming more and moreattention on it. On the one hand, enterprises can get many benefits from tax planning, suchas saving expenditure; on the other hand, it also promotes and standardizes the tax systemand avoids tax fraud. However, small and medium-sized enterprises (SMEs), which are themarket mainstay in our country, have some vacancies for tax planning research andapplication. Improving these deficiencies and providing tax planning guidance for SMEs arethe foothold of this paper.The study and discussion of this paper are based on the theory of corporate life cycleThe internal and external environment are important factors for tax planning. In order toimprove targeted and feasibility of SMEs tax planning, the life-cycle can be divided intothree periods: birth, growth, and maturity and decline. Under current tax law, this paperconcretely analyzes internal environment of each period. Through tax planning, SMEs canfoster strengths and circumvent weaknesses, promote enterprise development，and realizethe enterprise value.In the birth period, financing and investment resources of SMEs are narrow, and theirbusinesses are also simple. But SMEs have strong plasticity and flexibility for tax planning.Tax planning of financing, investment, and business are focused on reducing expenditure. Itcan shorten the period as soon as possible by effective control of cash flow.Growth and maturity period is the golden stage of SMEs. With their development,SMEs continues to widen financing channels, strengthen investment capacity, improvebusiness activities, and increase income. Relatively, SMEs will lose flexibility. In order tocompensate for these defects, when planning tax, SMEs have to stick to their goals andpriorities, and have an overall plan with a long-term vision. When decisions are made,SMEs should ensure that the goals of tax planning are always consistent with business goalsin each stage for financing, investment and business, so as to ensure tax planning are trulyeffective.The environment of SMEs in the decline period is relatively complex. Change orperish， different fates have different mothods in tax planning of financing, investment andbusiness.On this basis, to applicate and validate theories, the study analyzes SMEs in the growth and maturity period. And many small cases are used another phases. By combining theoryand practice, this study will provide tax planning guidance for SMEs.