Frontiers in Business, Economics and Management ISSN: 2766-824X | Vol. 14, No. 3, 2024 234 Research on Tax Planning of B Liquor Company Wenbo Zhu1, * 1 University of Science and Technology Liaoning, college of business administration, Anshan, 110325, China * Corresponding author: Wenbo Zhu (Email: 1847171290@qq.com) Abstract: Tax planning is an important part of enterprise strategic management and enterprise financial management.in recent years, the liquor industry as a traditional industry in China, the tax burden is relatively heavy. In this paper, B company as an example, within the scope of the tax law allows through tax planning, reasonable tax avoidance, reduce the tax burden of enterprises, to help enterprises achieve sustained and steady development, while its tax planning strategy has a certain degree of representation and reference. Keywords: Tax planning; liquor enterprise; sales link. 1. Introduction With the rapid development of China's economy, tax planning has gradually become an important part of corporate financial management. Company B is the leading enterprise in liquor industry in China, and its tax planning strategy has certain representativeness and reference significance. This report will take Company B as an example to analyze its tax planning strategy. 2. Overview of Tax Planning 2.1. Concept of Tax Planning Tax planning is also known as "reasonable tax avoidance," which is that the taxpayer uses legal means to raise and arrange the production and operation links of the enterprise in advance on the premise of legal compliance to reduce the cost of tax payment of the enterprise. In the process of modern enterprise management, tax planning occupies a more and more important proportion, large enterprises have a separate tax planning department, the level of tax planning has increasingly become an important indicator to measure the level of corporate finance. [1] 2.2. Purpose of tax planning Enterprise tax planning has a certain purpose: First, the operation of the enterprise standardized management, reduce the risk of law. For a business, they are most concerned about their own costs and profits. Excessive pursuit of interests is likely to lead enterprises to the wrong path and bear the corresponding legal consequences. The introduction of tax planning program can be a good solution to this problem, that is, in tax planning, enterprises can be arranged and executed in accordance with the plan, so as to achieve the purpose of reducing costs and increasing profits. In particular, the process of integrating the relevant knowledge of tax regulations with their own business activities in the design of tax planning programmes is tantamount to regulating and adjusting their operations within a legal framework, which then minimizes legal risks. Second, to restructure and improve the management capacity of enterprises. To reduce the tax burden, enterprises tend to operate in the direction of tax concessions granted by the government, and during this period they follow the government’s lead in the transformation of the industry, the renewal of products and the movement of goods. Moreover, the implementation of tax plans is both a study of the country's development policies and policies and a process that combines current development policies and trends with the development of enterprises, both to reduce the tax burden and to establish a scientific and efficient financial system that improves the efficiency of their operations and optimizes the enterprise's resource allocation. Third, reducing the tax burden and strengthening the firm's basic core competitiveness.Capital, costs, and profits are the three main elements of an enterprise’s financial operations. How to use capital rationally, and how to control and reduce the cost of investment in order to obtain more benefits has been the focus of the enterprise’s work. If the aim is to reduce costs and increase profits, then there will be more adequate capital guarantees for subsequent re-production and expansion of enterprises. At the same time, reducing production costs ensures both profitability and a greater advantage in the same product, thus achieving greater competitiveness in the same product at a higher value for money[2]. 2.3. Introduction to tax laws 2.3.1. Value-added tax Value added tax (VAT) is a turnover tax that refers to a tax on the value added component of the value in the course of a transaction for goods or services. In particular, VAT is a tax on the added value or value of goods in various segments of the production, circulation and services of goods. In the case of general taxpayers, the value added tax calculation formula is as follows: taxable = current sales tax - current advances tax, where the sales tax = sales × tax rate, sales = including tax sales (1+ tax rate). 2.3.2. Enterprise income tax The tax rate on corporate income tax varies according to the type of enterprise and the region in which it is located. In accordance with our tax laws, the tax rate for a resident's income tax is 25 per cent for a general enterprise and 20 per cent for a non-resident's enterprise. Taxable income = taxable income for the period × applicable tax rate, taxable income = total income - amount of deductible items. 2.3.3. .Consumer tax Consumer tax is a tax on specific consumer goods or services. Consumer tax is levied on a wide range of goods and 235 services, including tobacco, alcohol, cosmetics, and automobiles. The consumption tax rate varies depending on the goods or services, and generally adopts a proportional tax rate or a fixed tax rate. For example: liquor consumption tax is a compound plan, liquor consumption tax rate of 0.5 yuan / jin, the proportion of tax rate of 20%.The tax calculation formula is: tax payable = sales amount × proportional tax rate + sales quantity × fixed tax rate. 2.3.4. Others Trials In addition to these three taxes, there are personal income tax, stamp tax, resource tax, property tax, land value added tax, vehicle tax, customs duty, urban maintenance and construction tax, etc. 3. Company B profile 3.1. Company profile Company B's main business is alcohol products, etc., and its production method is unique, using a variety of models such as distribution mode and direct sales mode to ensure that each consumer is covered. At the same time, it has a wide range of influence and recognition in the domestic and foreign markets. 3.2. Current state of corporate development 3.2.1. Status of Corporate Development Company B, a large business with a focus on the production and marketing of alcohol, has a wide range of operations. It also includes areas such as modern manufacturing, modern packaging, modern logistics, financial investment, and the healthy industry. The company is committed to building a diversified industrial ecosystem and has achieved significant achievements and developments in a number of ways. 3.2.2. Status of operations Since 2018, company B’s net profits have grown from $18.7 billion to $37.2 billion. By the third quarter of 2023, B had achieved business income of 62.5 billion yuan, an increase of 12.11 per cent over the second quarter of 2023. By the third quarter of 2023, B had achieved net profits of 23.8 billion yuan. Table 1. Company B Statement of Financial Position 2018-2022 Unit: Billion Yuan Financial indicators 2018 2019 2020 2021 2022 Total assets 861 1064 1139 1356 1528 Total liabilities 210 303 261 342 361 Owner equity 651 761 878 1014 1167 Assets growth over years 21.39% 23.58% 7.04% 19.08% 12.68% Liabilities increase over years 29.09% 44.46% -13.75% 30.97% 5.54% Table 2. Company B Main Accounting Data and Financial Indicators for 2018-2022 Unit: Billion Yuan Financial indicators 2018 2019 2020 2021 2022 Business income 400 501 573 662 740 Operating costs 215 261 297 340 370 Selling expenses 37.784 49.856 55.789 65.035 68.442 Finance costs -10.850 -14.307 -14.855 -17.317 -20.264 Administrative costs 23.405 26.553 26.095 29.000 30.681 Operating profit 187 242 278 326 372 Total profit 186 241 277 325 371 net profit 140 182 209 245 280 Operating costs 215 261 297 340 370 3.2.3. Taxation Table 3. Company B's main taxes and fees from 2018 to 2022 Unit: Billion Yuan 2018 2019 2020 2021 2022 Income tax expense 45.682 58.778 67.651 79.430 91.329 4. Tax Planning Program Design The following assumptions are made from the tax planning programme of Company B's business sales chain. The marketing chain is a complex area whose objective is to improve the economics of enterprises through sound tax planning. Enterprises can work out the optimal tax plan according to tax regulations and related policies to reduce tax burden and improve capital utilization. Tax planning for the sales chain involves the major business sectors in the supply chain: the Ministry of Planning, the Ministry of Production, the Ministry of Logistics, and the Department of Marketing. Tax planning at this stage is crucial and necessary, not only for the best tax performance, but also for more accurate marketing plans. 4.1. Tax Planning Approach The following are the main tax planning methods used in the sales process. (1) Choice of depreciation method Sales discount refers to a kind of price preference given to the buyer in order to promote the sale of goods and recover the sales payment as soon as possible under the circumstances of credit sales and commercial credit. If the enterprise adopts sales discount and sells the product at the same price, the discount given to the other party will be included in the financial expense, and the VAT payable in this case will be the same as the original sales price. Through this sales discount 236 sales, you can reduce the tax burden of value-added tax Discounting is the activity of reducing the price of a product or service. Merchants will discount on the basis of the original price to attract consumers to buy. By using this method, the sales amount minus the discount can be recorded and declared, which can reduce the tax burden. A sale concession is a sale price reduction granted by an enterprise for reasons such as the non-conformity of the quality of the goods sold. After the enterprise sells the goods to the buyer, the buyer may require the seller to grant a price reduction if it finds that the goods do not meet the requirements in terms of quality, specifications, etc. If the sale is made prior to the recognition of the proceeds of the sale, the sales proceeds shall be recognized directly at the amount after the deduction of the sales proceeds; ; sales credits for goods sold that are recognized as proceeds of sale and that are not part of post-balance sheet transactions should, at the time the proceeds from the sale of goods in the current period should be offset against the amount of the recognized value added tax (VAT) if the deduction of the amount of the VAT tax is permitted as required For example, assume that Company B sells to Company A a series of liquor products with a total price of 26.58 million yuan excluding tax. A 5% discount is possible if payment is made within ten days. One per cent discount if payment is made after ten days or within thirty days. If payment is made after 30 days, the original price shall be paid without any discount. Option 1: Use a cash discount. The value-added tax payable can be calculated as 2658 × 13% = 3.4554 million yuan. Option 2: Use commercial discounts. The price will be fixed at 5% discount, payment within ten days, normal delivery, if more than ten days, collect 150.177million yuan breach of contract. The value-added tax payable within ten days of payment can be calculated as 2658 × 95% × 13% = 3.2826 million yuan. To sum up, it can be seen that Scheme I saves 172.8 thousand yuan compared to Scheme II. Similarly, the consumption tax and the urban construction surcharge will save the corresponding tax. (2) Planning for transfer packaging sales This method is to first separate the packaging of the wine product and sell it to other companies as a product. Then the liquor is sold, and finally the final packaging work is completed by it, thus forming two independent sales activities, and the cost of packaging is no longer included in the sales of liquor to levy consumption tax, which produces tax-saving benefits. 4.2. Expected effectiveness of tax planning Assuming the business of an enterprise's sales chain, other conditions are not considered for analysis as follows. Company B purchased 9,000 tons of barley and 6,000 tons of peas from company S of the original food company. For the production of 12,000 tons of white wine, the price of barley was $3,700 per ton and the price of peas was 1600 per ton. Company B and Company S agreed in the contract that the goods would be picked up by Company B to Company S, Company S gave Company B a price concession of 200000 yuan. Company S used Company L (as the general tax payer) to carry out the transportation, and the freight was 360000 yuan (excluding tax price). Company B was also stipulated in the contract to pay for the barley and peas in full within 15 days after the completion of the quality inspection. The depreciation method is the straight-line depreciation method, with an original value of 450000 yuan and a depreciable life of 15 years, having been used for 4 years, and an estimated net salvage value of 3%. The goods are targeted planned production, all sold to Company A, the price excluding tax is 60000 yuan / ton, giving Company A 5% cash discount for payment within 7 days after arrival and acceptance. After the withdrawal by Company A, Company B made a 400000 yuan discount. (1) Before tax planning Value added tax (VAT) payable: (12000×60000- 400000)×13%=93548000(yuan) Taxes on consumption should be paid: (12000×60000)×0.2+12000×2000×0.5=156000000(yuan) Urban construction taxes and surcharges are due: (93548000+156000000)×(5%+3%+2%)=24954800(yuan) Corporate income tax payable:((12000×60000- 400000)×97%-156000000- 24954800)×25%=129264300(yuan) Total tax payable: 93548000+156000000+24954800+129264300=403767100( yuan) (2) After tax planning At the time of sale, according to the previous research and analysis, the cash discount is changed into a commercial discount. Value added tax (VAT) payable: 60000×12000×95%×13%+300000×9%＝88947000(yuan) Taxes on consumption should be paid: ((12000×60000)×0.2+12000×2000×0.5)×0.95=148200000(y uan) Urban construction taxes and surcharges are due: (88947000+14820000)×(5%+3%+2%)=10376700(yuan) Corporate income tax payable: ((12000×60000- 400000)×97%-148200000- 10376700)×25%=134858825(yuan) Total tax payable: 88947000+148200000+10376700+134858825=261009525( yuan) Table 4. A comparison of the results of tax planning. Unit: Yuan Before planning After planning Value added tax (VAT) payable 93548000 88947000 Taxes on consumption should be paid 156000000 148200000 Urban construction taxes and surcharges are due 24954800 10376700 Corporate income tax payable 129264300 134858825 Total tax payable 403767100 261009525 Compared with before and after tax planning, the overall effect is good, and the total amount of taxes and fees that Company B needs to pay has saved tens of millions of yuan compared with before planning. From the final overall data, the planned program is further away from the goal of tax planning and creates more profits for the enterprise. 5. Conclusion The tax obligation of the enterprise is stipulated by law. 237 From this point of view, the enterprise tax payment is a necessary activity that cannot be evaded. From the perspective of the enterprise, if the enterprise can carry out tax planning through reasonable and legal means during the tax payment process, it will reduce part of the tax burden of the enterprise and improve the value creation of the enterprise. While increasing the value of the enterprise, it also improves the force majeure factors to deal with unexpected situations and enhances the core competitiveness of the enterprise itself. And then achieve the good operation of the enterprise. From the above B company's tax planning strategy analysis case, we can also see that Enterprises can reduce their tax burden and improve their economic efficiency through rational use of preferential policies, rational planning of VAT output tax and input tax, and rational use of enterprise organizational forms for tax planning. At the same time, the tax planning strategy of Company B also provides some beneficial enlightenment for enterprises: first, enterprises should pay attention to the changes of national tax policy and adjust the tax planning strategy in time; Secondly, enterprises should strengthen cooperation with suppliers and customers to achieve the goal of tax planning. Finally, enterprises should pay attention to improving the level of financial management and training professional tax planning talents to cope with the increasingly complex tax environment. In general, the tax planning strategy of Company B has typical significance, but in practice, the enterprise should consider various factors according to its own situation and work out a tax planning program that meets its own reality. At the same time, enterprises should follow tax laws and regulations, pay taxes according to law, avoid tax risks, and achieve sustainable development of enterprises. References [1] GUO Xiaoyu. A Study on the Tax Planning of C Company's Income Tax [D]. Hebei University of Technology, 2023. DOI: 10.27104 / d.cnki.ghbjy.2022.000196. [2] WANG Hongya. Research on Tax Planning of Liquor Enterprises under the Background of Big Data [D]. Shanxi University of Finance and Economics, 2023. DOI: 10.27283 / d.cnki.gsxcc.2023.000191.