LV EN RU DE FR

Tax Planning

Course developer

Prior knowledge

Ekon5082, Financial Accounting I

Ekon5144, Enterpreneurship Financing

Replaced course

EkonM004 [GEKOM004] Tax Planning

Course abstract

The study course provides an in-depth knowledge of the tax system and tax burden and skills in tax planning and law enforcement, with an in-depth learning of taxpayers' rights, obligations and responsibilities. During the course, students learn in depth about tax planning opportunities in the business as legal persons and individuals, and analyse the choices of different tax avoidance regimes.

Learning outcomes and their assessment

1) Understanding tax planning, tax burden and related terms - discussion in class.
2) Understanding Tax Credits and Benefits - Calculation Exam.
3) Understanding the different tax regimes - Calculation Exam.
4) Ability to make tax calculations, analyse the results obtained, understand the causes and develop proposals for finding the most favorable and advantageous solution - calculations during classes, presentation, exam.
5) Ability to choose the most appropriate tax treatment for a company, analyse and evaluate the benefits and losses associated with it, as well as assess the associated risks - independent work, lesson discussion, presentation, exam.
6) Ability to constantly evaluate the performance of another person and prepare a written conclusion about it - a review for the independent work of a colleague.
7) Ability to plan tasks responsibly - independent work.
8) Is able to select information, present and justify the calculations made, proposals made - independent work, presentation.

9) Ability to apply the acquired knowledge, successfully to calculate taxes and their discounts, considering different situations. Able to make proposals for decision-making according to changes in the company's internal and external environment - practical work, presentation, examination.

Course Content(Calendar)

1) The impact of taxation on business. Impact of tax payments on company finances and cash flow. Need for cost reduction (2 hours lecture).
2) The nature and trends of tax planning. Tax planning methods and basic principles. Calculation of the tax burden. Impact of Business Legal Form on Company Tax Payments. Taxation in Free Ports and Special Economic Zones. International Tax Convention (lecture - 2 hours)
3) Taxpayers' rights and how to exercise them. Tax and duty relief. Tax credits. Extension of tax payment deadline. Tax capitalization. Procedure of appealing the decisions of the tax administration. Reimbursement of overpayments and overpayments. SRS public databases (lecture - 2 hours, practical work - 1 hour)
4) Tax debts and surcharges. Consequences of tax debts. Cancellation of tax debts. Recovery of late tax payments. Adjustment of the tax amount. Tax administration right to specify tax rates. Calculation of tax payments by calculation. Tax surcharges (lecture - 1 hour).
5) Income Tax Planning. Income tax system in Latvia. Income Taxes in Agriculture: Tax Benefits, Differences in Tax Burden (2 hours lecture).
6) Personal income tax planning. Taxable and non - taxable income. Determination of taxable income from economic activities. Return on capital and growth in capital. Eligible expenditure by the taxable person. Benefits for the taxable person. Procedure for withholding and payment of tax. Procedure for declaring annual income. Different income tax regimes (lecture - 3 hours, practical work - 1 hour).
7) Corporate income tax planning. Resident taxpayers and non - residents. Tax base. Related party transactions. Transfer rates. Tax breaks and discounts, tax reduction options. Tax payment procedure (lecture - 2 hours, practical work - 1 hour).
8) Planning of State Social Insurance Obligatory Contributions (SSIA). Status of the socially insured person and procedure for calculation and payment of contributions (lecture - 2 hours, practical work - 1 hour).
9) Micro-enterprise tax planning. Tax Planning Options in a Micro Enterprise: Benefits and Disadvantages (1 hour lecture, 1 hour practical work).
10) Value Added Tax (VAT) planning. VAT system in EU Member States. VAT - exempt and non - taxable transactions. Determining the place of supply of goods and services, Advantages of a registered VAT payer. VAT calculation and payment procedure. Special rules for applying VAT and their use in VAT planning. Transactions with EU Member States and third countries. Special tax arrangements. Payment of the reverse charge. Application of cash principle (lecture - 2 hours, practical work - 1 hour).
11) Corporate car tax planning. Benefits of paying the tax. Possibilities of using tax exemptions (lecture - 2 hours).
12) Real estate tax planning. Taxable persons and taxable persons. Calculation of tax and payment procedure. Possibilities of using tax relief (lecture - 1 hour).
13) Excise tax planning. Taxable Items and Taxable Persons. Calculation of tax and payment procedure. Exemptions and benefits (1 hour lecture).
14) Natural resource tax planning. Taxable Items and Taxable Persons. Calculation of tax and payment procedure. Possibilities of using tax breaks, facilities and exemptions (lecture - 1 hour).

15) Student research presentations, reviews and discussion (practical work - 6 hours).

Requirements for awarding credit points

At the end of the course, student must pass an exam on the topics covered (40%).
Participation in discussions on topical issues and problem solving in practical classes (10%).

Description of the organization and tasks of students’ independent work

During the study course the following shall be developed:
1) Independent work on the student's chosen topic “Application of tax deductions and discounts” (10%);
2) Presentation on tax planning at the state, industry, legal or individual level (student chooses the topic) (40%);

3) Review of a colleague's independent work (presentation).

Criteria for Evaluating Learning Outcomes

Must be completed for all jobs. Each work is graded. The evaluation of the study course depends on the assessment of the independent work and exam, 10% corresponds to one point on the 10-point assessment scale.

Compulsory reading

1) Ketners K. Nodokļi un nodokļu plānošanas principi. Rīga: Tehnoinform Latvia: Info Tilts, 2018. 320 lpp.
2) Ketners K. Nodokļu plānošana. Rīga: RTU, 2007. 115 lpp.
3) Ketners K., Pētersone M. Eiropas Savienības nodokļu politika. Rīga: Rīgas Tehniskā universitāte, 2014. 208 lpp.
4) Jurušs M. Nodokļi. Rīga: RTU Izdevniecība, 2019. 176 lpp.

Further reading

1) Andrejeva V., Ketners K. Valsts ieņēmumu teorijas pamati. Rīga: RTU, 2008. 440 lpp.
2) Blazek J. Tax Planning and Compliance for Tax-Exempt Organizations. John Wiley & Sons, 2014. 176 p.
3) Corporate Loss Utilisation through Aggressive Tax Planning OECD Publishing, 2011. 92 pp.
4) Finnerty C., Merks P., Petricone M. Fundamentals of international tax planning. Amsterdam, 2007.
5) Hadnum L. Tax Planning for Property Investors, Createspace. Independent Pub, 2014.124 p.
6) Henderson G.D., Goldring S.J. Tax Planning for Troubled Corporations. 2007. 1051 p.
7) Karayan J. E., Swenson C. W. Strategic Business Tax Planning. New Jersey, 2006. 456 p.
8) Kaushal K. A. Corporate tax planning. New Delhi, 2008. 369 p.
9) Ketners K. Nodokļu optimizācijas principi. Rīga: Merkūrijs LAT, 2008. 116 lpp.
10) Ketners K., Lukašina O. Nodokļi ES un Latvijā: salīdzinoša analīze un praktiski ieteikumi. Rīga: Merkūrijs LAT, 2008.
11) Ketners K., Titova S. Nodokļu politika Eiropas Savienības vidē. Rīga: Banku augstskola, 2009. 27 lpp.
12) Leibus I. Pašnodarbināto grāmatvedība un nodokļi. Rīga: Lietišķās informācijas dienests, 2018. 148 lpp.
13) Leibus I. Pirmie soļi komercdarbībā: darbības uzsākšana, grāmatvedība, nodokļi. Rīga: Lietišķās informācijas dienests, 2016. 116 lpp.
14) McLaughlin M. Tax Planning 2013/14. 2013. 1008 p.
15) Podvinska Ņ. Pievienotās vērtības nodoklis. Rīga: LID, 2006. 272 lpp.
16) Schanz D., Schanz S. Business Taxation and Financial Decisions. Magdeburg, 2010. 422 p.
17) Spencer P. Property Tax Planning. A&C Black, 2013. 422 p.
18) Tax Planning Strategies: Tax Savings Opportunities for Individuals and Families. CCH Editorial Staff Publication. 2007. 180 p.
19) Zvejnieks A. Īpašums un nodokļi. Rīga, 2006. 575 lpp.

Periodicals and other sources

1) Valsts ieņēmumu dienesta mājaslapa. Pieejams: http://www.vid.gov.lv
2) LR likumi un MK noteikumi: Latvijas Vēstnesis. Pieejams: http://www.likumi.lv
3) LR Ministru kabineta mājaslapa. Pieejams: http://www.mk.gov.lv
4) LR Finanšu ministrijas mājaslapa. Pieejams: http://www.fm.gov.lv
5) LR Augstākās tiesas mājaslapa. Pieejams: http://www.at.gov.lv
6) Taxation Trends in the European Union. Data for the EU Member States, Iceland and Norway. Pieejams: http://ec.europa.eu/taxation_customs/resources/ documents/taxation/gen_info/economic_analysis/tax_structures/2014/report.pdf
7) Taxation and Customs Union. Pieejams: http://ec.europa.eu/taxation_customs/common/about/welcome/index_en.htm
8) Tax Foundation. Pieejams: http://taxfoundation.org

Notes

Restricted elective course for the academic master study program “Economics” in “Financial Management and Accounting”.