Application of economic analysis in the context of tax planning for economic entities

Abstract

The article examines the role and the peculiarities of conducting the financial analysis for taxation purposes. It determines the objects, the tasks of the financial analysis for taxation purposes and proposes the principal stages of its realization: to assess the influence of external factors, to learn the dynamics of tax payments, to assess tax risks, to study the levels of tax load, and to analyze the alternative variants of accounting policy elements. The authors tested the proposed the methods of the financial analysis for taxation purposes at one of the researching enterprises of Ukraine. The paper introduces the concept of “tax risk” where the present study means the probability to pay unplanned expenditures by a taxpayer in the future in a case if this taxpayer does not follow the tax legislation. The authors develop the principal stages for conducting the assessment of tax risks concerning profit tax charges and payment: to determine the types of tax risks; to rank and assess the tax risk levels. To assess tax risks the researchers propose the scale for the assessment of tax risk inception probability and apply the following indices of mathematical statistics: the mathematical expectancy of random value, the average quadratic error of random value, and the coefficient of variation, which are calculated on the basis of the enterprise’s statistical data for a definite preceding period.

Keywords

• taxes
• financial analysis for taxation purposes
• tax risks
• alternative variants
• chart of tax risks
• tax load