300.F大学生使用信用卡现状分析及对策-信用卡消费习惯调查 外文

1、DraftVersionPlease dontquote.TaxPlanning in Business: Bangladesh PerspectiveSapan Kumar Bala, CAssociateProfessorDepartmentofAccounting&InformationystemsUniversityofDhaka,DhakaAbstract:This paper highlights the tax planning issues in the context of buiness environment in Bangladesh. Given the coplex

2、ityandthe tax law abiguity prevailingin Bangladesh,thispaperencompassesthetraditional tax planning dvices along with a brief ovrview of the Scholes-Wolfson paradigm of tax planning strategies. The fiscal plans are referred to the related tax law provisions (mentioned in the appendices in a very orga

3、nized anner), which are expected to be very useful for the existing andpotential busnessmen.Keyords:Taxcopliance,TaxinimizationEffectivetxplanning,Taxstrategy,Taxinentives.1DraftVersionPlease dontquote.TaxPlanning in Business: Bangladesh PerspectiveSapan Kumar Bala, CAssociateProfessorDepartmentofAc

4、counting&InformationystemsUniversityofDhaka,DhakaIntroductinThe term tax plannig n business consists of thee ain words: tax, plannng, and busness. Tax is “a contribution exacted by the state” Chambers English Dictionary (192). “The term taxes is confined to copulsory, unrequited ayents to general go

5、vernment” (OECD, 1988: 37; vide Wilkinson, 992: 2). Plnning is “the process of deterining in advance the factors necessary toachieve a set ofgoals;designing aneffectivemeansofachievingsomefuturegoals(ends)”KohlersDictionary fr Accountans(Cooperad Ijiri, 184: 383). Businessmeans “the carrying on of t

6、rade orcommerce, involvigthe useof capital andhaving,as a majorobjective,incomederivedfromsalesofgoods or services” Kohlers Dictionary for Accountants (Cooper and Ijiri, 194: 78). According to section 2(14) of the Income Tax Ordinance (ITO), 1984, “business” includes any trade, commerce ormanufactur

7、e, or ay advnture or conern in the nture of trade, comerce or anufacture.1 Thus,tax planning in business means dealing with the tax matters of a business entity with a view to maxiizing the after-tax rate of return on ivesments after ensuring voluntary tax copliance. Forthis purpose,eachbusinessenti

8、tyhasto1.ensurethat it keepsproperrecords;2.deducttaxatsourcewhereit isnecessary;3.payadvancetaxintie,if applicable;4.file returnsintime;5.coply withnoticesreceivedfromthetaxauthorities;and6.beawareoflegal remedieswhereit doesnothaveits ightsudertelawrecognzed.Taxfunctionactivitiesofa businessentity

9、 arethoseactivities whichareconcernedwithfiscalissues.These functions are of two types: (1) tax copliance activities, and (2) tax panning activtie. Tax compliance activities are those activities which include the functions or obligations according to the provisions of various fiscal statutes. Tax pl

10、anning activities means dealing with the tax matters of a taxpayer with a view to axiizing the after-tax rate of return on investents after ensuringvoluntay taxcopliance.FORMSOFBUSINESSVS.TAXPAYINGENTITYA business entity ay be of three types: sole-proprietorship, partnership firm and copany. “Sole-

11、proprietorshp” hasnotbendefinedy theIncoeTaxOrdinance.Undersection 2(32) of the ITO, “firm” has the same meaningas assignedto it in the PartnershipAct,1932(IXof 1932).Undersection4 of the PartnershipAct,1932,“Partnership”is the relationbetweenpersons who have agreed to share the profits of a busines

12、s carried on by all or ay of them acting forall. Persons who have enered into partnershipwith one anotherare called individually“partners”andcollectively a fir”,and thenameunderwhichtherbusinessiscarriedoniscalled the“firmnae”.1 Sectio, sub-section, rule, sub-ule, clause or proviso mentioned elsewhe

13、e in this paper without refering to ay enactment shall be refered to te Income Tax Ordinance, 1984 Ordinance No. XXXVI of 1984) and the Income Tax Rules, 1984N. S.O.3/L/85dated 15, vide sec. 1854) of te Icome TaxOrdinace, 1984.2DraftVersionPlease dontquote.Undersection2(0) of the ITO, “copay” eans a

14、 copany as definedin the Copanies Act, 1913(VII of 1913)orCopaniesAct,1994ActNo.18of194)* andncludes(a)a body corporate established or constituted by or under any law for the time being inforce;(b)any nationalsed banking or other finncial institution, insurance body and industrial orbusiness enterpr

15、ise;(bb)anassociationorcobinationofpersons,called by whatevername,ifanyofsuchpersonsis a copany asdefinedin theCopaniesAct,1913orCopaniesAct,1994;(bbb)anyassociationor body incoporated by or under the laws of acounty outsideBangladesh;and;(c)any oreign ssociationor boy, notncrporated y or underay la

16、w,whichthe NationalBoard of Revenue may, y general r special order, declare to be a copay for hepurposesofthe IncomeTaxOrdinance.Forpreferentialtax purpose,from assessentyear (AY) 2002-203vide the FinanceAct 2002 to theFinanceAct2006copaniesareclassifiedintofolwinggrops:(1) Copany beingbank,insurnce

17、orfinancialinstitution;(2) Othercopanies:(a) Copany notpublicytraded;and(b) Publiclytraddcopany.From AY 2002-203, as per the Explanation given in the relevant Schdule for income tax rates inthe Finance Act, “publicly traded company” means a company which fulfills the followingconditions:(a) Thecopan

18、yisregisteredinBangladeshudertheCopaniesAct193or94;(b) The copany is enlisted with the Stock Exchangebefore the end of the concerned incoe yearin which incometaxassessmentwill bemade.Taxpayers Status: Under the Income Tax Ordinance, 1984, a taxpayer has two types of status: personal status and resid

19、ential statu. A sole-propretorshiphas no separate tax pyig detiy andindivdual oner runnng he sole-propietorshipwill have “Indivdual”statusof the ownerand ot ofthe business entity, but both partnershipfirm and copany have distinct personal status “Fir” and“Copany” respectively.Residential status may

20、be resident defined u/s 2(55), ITO or non-resident defined u/s 2(42), ITO. Under section 17, resident assessee (taxpayer) has to pay incometax on total lobal incoe includig foeign incoe, but on-resient taxpyer has to py icoe taxonly on his total doestic (Bangladeshi) incoe as deterined u/s 18 (incoe

21、 deeed to accrue orarise in Bangladesh). Uner section 255), an indidual is to be a resident if his perid f stay inBangladesh is at least 182 days n the concerned incoe year, or at least 90 days in the concernedincome year, and at least 365 dys in the preceding 4 income years. A partnership firm is c

22、onsideredas resident,if the control and anagementof its affairs situated wholly or partly in Bangladeshin theconcerned incoe year. A copany will be a residnt, if conrol and anageent of its affairs situated wholly in Bangladesh in the concerned income year. Otherwise, a taxpayer will be treated as no

23、n-resident u/s2(42).Levels of Taxation: Question regarding whether the entity itself and/or the owner(s) of the entiyis(are) taxable is explained on the basis of two concepts: pass-through enity (or flow-through entit)and nonpass-throughenti:Pass-Through Entity: This entity is not taxable itself. Th

24、e income of the entiy will passthrough the ownersand is taxableafter its accuulation with the owners other income.Sole-proprietorshp isa pass-throughentiy.Theowneroftheentiy isaxablefortheentireincomeof thebusinesentity (wheherwithdrawnornot)alongwithhis/herotherincoe.* Undr section 21)(d)of theCopa

25、nies Act 1994, “opany” eans a copany foredand rgisterd undr this Actor an existing copany.3DraftVersionPlease dontquote.Non-Pass-Through Entities: This entity is taxable itself. The income of the entiy ay be distributed to the owners and is usually again taable in the hands of owners after its accuu

26、lation with hisher other incoe. Partnership irm and company are non-pass-throughentities.Apartnershipfirmis taxable for its incomein frst instanceas a non-pass-throughentiy. The partnersof the firm shall include the share of total incoe of the firm in the incoe year to be coputed u/s43(3)and but to

27、avoid duble taxation,the share of income will be treated as tax-freeincome subjectto “tax rebate at average tax rate (ATR)” if the firm has already paid tax on its incoe paragraph16, Part-B, Sixth Schedule. But where any tax payable by any partner of a firm in respect of his share of income cannot e

28、 recovered from hi, then DCT (Depuy Comissioner of Taxes) shallcollect it from the firm sec. 98. In case of discontinuedbusinessof a firm or if the firm is dissolved,the partners are jointy and severally lable to py ue tax, if ay sec. 99. See few other statutoyissues regardingpartnershpfirmand partn

29、ersinApendix-I.Acopany istaxableforits total incomealwaysasa non-pass-throughentiy.Theshareholdersofthecopany are taxable for the income of the entity, ony if distributed to them as dividend, which issubject to a source-tax ( 10% (u/s 5). At the tie of sale/transfer of shares, the shareholder ay req

30、uire to py tax on capital gain arising from the sale or transfer. Thus, shareholder-level of tax t)usually incldes tax on dividend disributed and tax on capital gain on ale/transfer of shares. However, capital gain on transfer of shares of a compay established under the Copanies Act 194is subject to

31、 a reduced rate of 10% S.R. No. 220-Ain/ykr/2004 dated 204, but the capital gain on transfer of stocks and shares of public copanies listed with a stock exchange inBangladesh isfullyexeptedsec.32(7).In case of a non-pass-throughentiy, thre is at least double-level taxation. Firs, a tax is paid by he

32、entiy and then a second tax is paid by the owners of the entity (partners of a firm or shareholders of copany). In case of firm which has duly paid its tax, double taation is avoided by consiering theshare of firms incoe as tax-free and allowing a tax rebate thereon to the partners. But in case of a

33、 copany, the copany hs to py tax on its ncome at 30, % or 45% ad then the dividualshareholders have to py ource-tax at 10%, whih will be treated as advance income tax (AIT) and then considering the arginal tax rate of the concerned shareholders, tax rate on divided may be upto 25% for high-incoe tax

34、payers. In case of a copany investing in shares of another copany, there will be triple taxatn. The copany of which shares have been purchased has to py first-level tax on its income at 30, 40% or 45. Then the inesting copay has to py second-level tax ondistributed dividend at 15% and when it will d

35、istribute its incoe as dividend, its individulshareholderhastopaythid-leveltax(source-taxandpossibleextratax).TAXEVASION,TAXAVOIDANCE,ANDTAXPLANNINGTax reduction strategies are often tinted with legaliy. Income tx statutes have provisions forcharging tax on “ay ncme, profits or gains, from whatever

36、source derived” u/s 2(34)(a) nd hence, according to the spirit of this provision, legality of the source may not be questioned if tax is dulypaid. Suffice it to say, in the Incoe Tax Ordinance, there are several sections where investment out of undisclosed income can be legalized y pying tx at a sti

37、pulated rate not always on the investedaount and he tax rate is often vey w e.g., specific tax rate at Taka 300 or Taka 500 or Taka 200 per square meter for investent in house property u/s 19B, 7.5% of the deed value in case ofinvestent u/s 19BB, and 10% or 15% of the purchase value in case of inves

38、tment in otor vehicle.Income by way of winnings from “card gaes and other games of any sort or from gambling orbetting” referred to in section 19(13) is subject to source-tax of 20% (u/s 55) and this tax deducted at source is a “final discharge of tax liabiliy” u/s 82C(4). However, given thse oral i

39、ssues, whiledealing with any sort of srategy regaring tax, we ust be aware about he istinctions aong taxevasion, taxavoidanceandtaxplannig.4DraftVersionPlease dontquote.TaxEvasionTax evasion has the objective of reduction of tax illgally. metimes, it is referred to as taxcheating” through acts of co

40、mission or oission. Deceit, concealent, and/or isrepresentation arecomonelementsin ostillegal taxplans(Sommerfeldet al.,1980:281).Asstatedby Wbleyet al.(1991: 2-3), “Noncopliance is a ore neutral term than evasion since it does not assume that an inaccurate tax return is necessarily the result of an

41、 intention to defraud the authorities and it recognizes that inaccuracy may actually result n overpayent of taxes. In evading ax one isknowingy beaking the lw. This has social and pychological consequencessuch as stigma and guiltand involves confronting different costs since there is a risk of being

42、 caught and fined or sent toprison.”Accordingto Lakhotia and Lakhotia (1998: 9), “The expression Tax evasion means illegally hdingincome or concealing the particulars of income or concealing the particular source or sources of income or in manipulating the accouns so as to inlate the expenditure and

43、 ther outoins with a viewtoillegally reduce theburdenoftaxation.Hence,taxevasionisillegal andunethical.”TaxAvoidaceTax avoidace and tax evasion usually both hae same objective of reduction of tx, but tax avoidance encopassesonlylegal eansofachievingtheobjective.JusticeJagadisan J. has entioned in th

44、e verdict of Aruna Group of Estate v. tate of adras (1965)case, “Avoidanceof tax is not tax evasion and it cares no ignoiny with it, r, it is sound law and,certainly, not bad orality, for anyody to so arrangehis affairsas to reducethe bruntof taxaion to a miniu.”(Palkhivala andPalkhivala1976:46).Avo

45、idance involves every attept by egal eans to prevent or reduce tax liabiliy which wouldotherwise be incurred, y taking advanage of some provision or lack of provision in the law it presupposesthe existenceof alternatives,one of which wouldresultin less tax than the othr (Reportof theRyalComission of

46、Taxation966:538;eWebleyet al.191:2).Tax avoidance “is the art of dodgng axes without breaking the law. tax avoidance means of traveling within the fraework of he aw or acting as per the language of he law ony in or, but urdering the very spiit of the law and thus acting against the intention of the

47、law and defeating thepurpose ofeparticularlegal enactnt”(LakhotiaandLakotia998:10).Perhapsthe ost celebrated statement made in defense of tax aoidance cae from the pen of JudgeLearnedHand.Ina dissentingopinion,inCommissionerv.Newmancase,heoncesaid:Over and over again courts have said that thee is no

48、thig siniser in so arranging onsaffairs as to keeptaxesas lowas possible.Everyboydoesso, richor poo,andll do riht,for nboy wes any ubic duy to py ore than the law demands: taxes are enforcedexactions, notvoluntay cntributons.o demandoreinthenameof oralsis erecant.Commissioner v.Newman,88 (CA-2,19),v

49、ideScholeset al.,2002:5.TaxPlannigAs stated earlier, tax planning is legal, desirabe for the fiscal policyakers and ethical. In a narrow sense, tax planning and tax avoidance are used intrchangeaby. But for tax avoidance purpose, usual means are the exploiting the tax loopholes, or getting the advnt

50、ages of tax law abiguity, adhence it is often distinguihed from tax planning. ccording to Lakhotia and Lakhotia (1998: 0), “Tax plannin takes axium advantage of the eeptions, deductions, rebtes, reliefs and othertax concessions allowed by taxation statutes, leading to the reduction of the tax liabil

51、ity of the taxpayer.”However,accordingto Scoles and Wofson (192: ), “Traditionalapproachesto tax planig fail orecognize that effective tax planning nd tax iniation are very different thigs. Te reason isthat in a world of costy contracting, ipleentation of tax-miniizing strategies ay introduesignific

52、ant costs along nontax diensions. Therefore, the tax-iniization strategy ay be5DraftVersionPlease dontquote.undesirable. After all, a particular easy way to avod pying taxs is to avoid investing in profitable ventures.” Thus, effective tax plannng means not to miniize tax, but to maximize after-tax

53、rates of return on assets.COMPLIANCEOBLIGATIONS OF A BUSINESS ENTITY UNDER ITOFollowing are the tax compliance obligations of a business entity as per various sections the IncomeTaxOrdinance1984:(1) Obligationsofa businessentity asanassessee(taxpayer):(2) Obligationsofa businessentity asa taxcollect

54、oronbehalfoftaxauthority:(3) Obligationsofrelated personsofa businessentity.(1) Complianceasanassessee(taxpayer):- CollectionofTIN(Tax-payersIdentificationNuber)Certificate u/s184B,84A- DisplayingofTINCertificate u/s184C- Advanceincometaxpaymentu/s48,6-73- Preparationoftaxreturnus75- Payentoftaxaspe

55、rtaxreturnu/s74- Filingoftaxeturnandstateentsinprescribedforsu/s75- Filing of revsed return if any oission or incorrect statement in the previously filed return discovered beforetheassessentis madeu/s78- Maintenanceofaccountsandocuents:u/s35- Productionofaccountsanddocuentson receiptsofa noticefromt

56、heDCT:u/s79- Cooperation with income tax authority urng inpection (u/s 114), survy (u/s 115),enquiy (u/s 116), search and seizure (u/s 117) and verification regarding dduction orcollection ofaxat source(u/s117A)- Copliance withvariousnotices:NoticeofDemandu/s13,Noticetofile returnu/s77,Noticetoprduc

57、eaccounts,statementsanddocuentsu/s79,Noticetofile statement ofassets,liabilities ndlife styleu/s80norallyapplicablefor individual assessee,Noticetoattendhearingu/s83(1)incaseofassessmentafterhearing,Noticetoinformre-assessmentu/s93(1),Noticetoattendhearingus130incaseofiposingpenaltyu/s123-128,Notice

58、 to the transferor, the transferee and the person in occupatin of he immovablepropery to initiate the proceedingsfor acquisition of the imovable property u/s 32(4)and u/r 42 if the fair arket value of the property exceeds the transferors declaredvalue andoters,andso on.(2) Copliance asataxcolectoron

59、behalfoftaxautority:- CollectionofTaxCollectionAccountnberu/s18BB- Taxdeductionat sources(TDS),ifapplicabl,anddepositthereoftotheTreasuryu/s48-63- GivingdocumentsofTDSwithnecessaryinforationu/s58,and- Furnishing annual returns in case of payent of salary (u/s 108), interest (u/s 109) anddividend (u/

60、s110).(3)Complianceobligationsofrelatedpersonsofabuinessentity.- Appearanceon behalfoftheassesseeat anyincoetaxproceedingsu/s174,- Legal representative to be treated as deemed to be assessee in case of a deceased person u/s92,- Liabiliy in ertain cases (as a representativeof another person u/s 95, a