Module : BLT
305: Business Tax Planning
Programme :
B.Com
Credit Value :
12
Prerequisite :
General
Objectives
- Provide
overview
knowledge of direct tax laws and the emphasis is on business tax planning
and their impact on business decision making processes
Learning
Outcomes
Upon successful completion of the module,
student is expected to:
- explain
the
concept of tax planning, tax evasion, tax avoidance and tax management.
- explain
the nature of corporate taxes in Bhutan
- explain
tax planning with reference to setting up of new business, financial
management decision, and specific management decisions
- explain
tax planning provisions with reference to business re-structuring
- explain
international tax planning procedures and practices
CONTENT
Unit-
I: Introduction to Tax Planning (5
Hours)
Introduction to
tax planning - Meaning, tax evasion, tax avoidance and tax management.
Unit-
II: Taxing Corporations (7
Hours)
Corporate
tax – corporate tax in Bhutan, types of companies for CIT, residential status
of corporations and tax incidence, full and limited tax liability, tax on
distributed profits – dividend imputation.
Unit-
III: Tax Planning and Management Decisions (8
Hours)
Setting
up of a new business: location aspects, nature of business, form of business
organization; Financial Management Decisions: capital structure, dividend
including deemed dividend and bonus shares; Distribution of Assets at the time
of Liquidation; Specific Management Decisions: make or buy, own or lease,
repair or replace.
Unit
-IV: Tax Planning for Business Re-structuring (7
Hours)
Special
provisions relating to business restructuring: amalgamation, de-merger,
conversion of sole proprietorship concern/partnership firm into company,
transfer of assets between holding and subsidiary companies.
Unit-
V: International Tax Planning (13
Hours)
International
Aspects of Corporate Tax Planning - international tax planning characteristics,
double taxation and relief there from, tax havens, taxation issues in FDI,
treaty shopping, transfer pricing and other income shifting techniques;
Antiavoidance Legislation/Rules - special rules to combat tax avoidance: thin
capitalization, controlled foreign companies, transfer pricing and tax havens;
International Aspects of Current Bhutanese Taxation Law and Practice – taxation
of non-resident in Bhutan, withholding of taxes; recent trends of tax problems
created by electronic commerce, double tax treaties(OECD Model), development
and issues in taxation in Bhutan and overseas, and ethical issues in taxation;
Comparative Study of Income Tax Systems - taxation of individuals in SAARC
countries.
Teaching
Strategies
·
Lectures
·
Tutorials
·
Presentations
and Projects.
Assessment
·
Assignment
30%
·
Project
work and presentation 30%
·
End-Semester
Exam 40%
Total 100%
Essential
Texts
- The Course Pack (Gaeddu
College of Business Studies)
- The Income Tax Act of the Kingdom of
Bhutan 2001.
- The Rules on the Income Tax Act of
the Kingdom of Bhutan, 2001 (5th edition 2005), DRC,
Ministry of Finance, Royal Government of Bhutan.
References
- Ahuja, Girish, and Ravi Gupta, Corporate
Tax Planning and Management, Delhi, Bharat Law House.
- Pagare, Dinkar, Direct Tax
Planning and Management, New Delhi; Sultan Chand and Sons.