Tax Planning refers to the prior planning and arrangement of business, investment, financial management and other activities within the scope prescribed by tax laws. Try to obtain the tax - saving benefits as much as possible. It is one of the non - verification - performance business contents that tax - agent institutions can engage in. Tax Planning is a liberal translation of "Tax Planning". Literally, it can also be called "tax planning", "tax plan", but since in China the tax department's arrangement for tax collection tasks is called "tax plan", in order to avoid confusion with it, when introducing this term from foreign literature at the beginning, it was translated as "tax planning", "tax - paying planning", "tax planning" to reflect the characteristics of planning and arrangement that tax planning has.

Concept
Tax planning refers to a series of planning activities that, prior to the occurrence of tax - paying behavior and on the premise of not violating laws and regulations (tax laws and other relevant laws and regulations), make prior arrangements for tax - related matters such as the business activities or investment behaviors of the tax - payer (legal person or natural person) in order to achieve the goals of paying less tax or deferring tax payment.
Taxpayers, on the premise of not violating laws and policies, relieve their tax burdens as much as possible through the arrangement and planning of business, investment and financial management activities to obtain the "tax - saving" (tax savings) benefits. This kind of behavior has existed for a long time. Tax planning in western countries started relatively early in research and practice. It attracted social attention in the 1930s and was recognized by law. In 1935, Tomlin, a member of the House of Lords in the United Kingdom, proposed for tax planning: "Any person has the right to arrange his own business, and doing so in accordance with the law can pay less tax. In order to ensure the benefits from these arrangements... he cannot be forced to pay more tax." His idea won the recognition of the legal community, and this principle spirit was often cited in subsequent tax cases in the United Kingdom, Australia and the United States. In the past 30 years, tax planning has developed rapidly in many countries and has increasingly become an essential and important part in taxpayers' financial management or business management decisions. Many enterprises and companies hire special high - level tax - planning talents or entrust intermediary institutions to offer advice for their economic activities. In China, since tax planning was introduced in the early 1990s, its functions and roles have been continuously recognized, accepted and valued by people, and it has become a particularly promising business for relevant intermediary institutions.
Tax planning is a basic right of taxpayers, and the benefits obtained by taxpayers on the premise that the law allows or does not violate tax laws should be legal benefits.

Background
In work, have you ever encountered the following situations:
The company has to pay many types of taxes and the burden is very heavy. The company management always hopes that the finance department can find ways to reduce the tax burden.
The contracts signed by the business department do not clearly state that the overseas payee shall bear the tax burden. As a result, when making external payments, the company has to pay for this part of the tax, which increases the cost additionally.
I always hear that some enterprises are doing tax planning, but I have never been clear about how it is actually done.
Tax knowledge is relatively professional, and ordinary financial personnel cannot master it well. Moreover, tax policies change frequently, and new regulations are becoming more and more difficult to understand.

Characteristics
Tax planning has the characteristics of legality, planning, purpose, risk and professionalism.
Legality
Legality means that tax planning can only be carried out within the scope permitted by tax laws. There are two meanings here: one is to abide by tax laws; the other is not to violate tax laws. Legality is the prerequisite for tax planning. When there are multiple alternative tax - payment schemes, taxpayers can make the optimal tax - payment choice by using their familiarity with tax laws and their mastery of practical techniques, thereby reducing the tax burden. For behaviors that violate tax laws, evade tax - paying responsibilities to reduce the tax burden, they belong to tax evasion and tax avoidance, which should be firmly opposed and stopped.
Planning
Planning means that before the occurrence of tax - paying behavior, economic matters are planned, designed and arranged to achieve the purpose of reducing the tax burden. In economic activities, tax - paying obligations usually have a lag. Enterprises pay turnover tax after the occurrence of trading behavior; pay income tax after the realization or distribution of income; pay property tax after the acquisition of property. This objectively provides the possibility of making prior tax - payment planning. In addition, business, investment and financial management activities are multifaceted, and tax regulations are also targeted. Different taxpayers and taxable objects usually have different tax treatments, which on the other hand provide taxpayers with opportunities to choose decisions with lower tax burdens. If business activities have already occurred and the taxable amount has been determined, and then tax evasion or tax arrears are carried out, it cannot be regarded as tax planning.
Purpose
The direct purpose of tax planning is to reduce the tax burden. There are two meanings here: one is to choose a low - tax burden. A low - tax burden means lower tax costs, and lower tax costs mean a high capital recovery rate; the second is to defer the tax - paying time (not referring to the tax - arrears behavior of not paying taxes within the time limit prescribed by tax laws), and obtain the time value of money. Through certain techniques, in terms of fund utilization, collect money in advance and delay payment. This will mean that the enterprise can get an "interest - free loan", avoid high marginal tax rates or reduce interest expenses.
Risk
The purpose of tax planning is to obtain tax benefits, but in actual operation, it often fails to achieve the expected results, which is related to the cost and risk of tax planning.
The cost of tax planning refers to the cost increased due to the adoption of a tax - planning scheme, including explicit costs and implicit costs, such as the expenses of hiring professionals, and the opportunity cost caused by adopting one tax - planning scheme and giving up another. In addition, inaccurate understanding of tax policies or improper operation, and unconsciously adopting a scheme that causes the enterprise's tax burden to increase instead of decrease, or being punished by the tax authorities for violating the law may all make the results of tax planning deviate from the expected results.
Professionalism
Professionalism not only means that tax planning needs to be carried out by financial and accounting professionals, but also means that in the face of socialized mass production, global economic integration, increasingly frequent international trade business, an increasingly large economic scale and increasingly complex tax systems in various countries, it is powerless for taxpayers to carry out tax planning by themselves. Therefore, tax agency and tax consulting, as the tertiary industry, emerged as the times require and develop in a professional direction.

Basic Methods
There are many methods of tax planning, and in practice, multiple methods are also combined for use. In practice, methods such as tax - preference - policy method, tax - payment - period deferral method, transfer - pricing - planning method, using tax - law - loophole - planning method and using accounting - treatment - method - planning method are all tax - planning methods.