Tax Planning Strategies for Taiwan Enterprises in Making Capital Investment

• Main Authors: Lu,Hsin-Chun, 呂欣諄
• Other Authors: Ma, Chia-Ying, Ph.D.,CPA
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/67173540264475712381

碩士 === 東吳大學 === 會計學系 === 91 === Abstract The global competition severe challenges most enterprises. To strengthen their competitive advantage and increase profitability, enterprises are increasingly looking further any opportunities to expand their operations outside home-countries, even building worldwide strategies involving substantial investment programs. Whether capital investments are deliberate or incidental to other objectives, the underlying goals are to profitably integrate the enterprise’s global operational resources, to achieve ‘business sustainability’ and maximize shareholder wealth. For an enterprise to achieve any of its other objectives, the fundamental precondition is that it first have a sustainable business model; that is, one that assures the long-term continuity of operations. Business sustainability, however, depends on the cultivation, accumulation, and renewal of the firm’s sources of competitive advantage. Competitive advantages make a firm highly profitable, and high profit levels add momentum to the sustainable growth of the business. In a virtuous circle, profit can be used to strengthen competitive advantage, which leads to further profit. Although the basic strategy for raising after-tax profitability involves extending market share and growing revenues, in an era of slim profit margins, management and control functions must also be unrelenting in their efforts to limit costs. An important factor in cost control, moreover, is proper tax planning. This study explores the tax planning strategies of local companies that are making capital investments both at home and abroad. The analysis is from the point of view of existing tax law, and includes five areas important to strategic decision-making: type of organization; investment approaches; choice of location for reinvestment; the design of foreign investment architectures; and planning for investment recovery and withdrawal. The investigation will consider the aggressive use of tax incentive measures, the choice of an optimal path for tax liability, and the structuring of a tax planning strategy that maximizes net income, minimizing the present value of tax payment, but minimizes the of risk of tax jurisdiction disputes.