Course Catalogue

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

  1. The Course Pack (Gaeddu College of Business Studies)
  2. The Income Tax Act of the Kingdom of Bhutan 2001.
  3. 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

  1. Ahuja, Girish, and Ravi Gupta, Corporate Tax Planning and Management, Delhi, Bharat Law House.
  2. Pagare, Dinkar, Direct Tax Planning and Management, New Delhi; Sultan Chand and Sons.