An Exploration Of Some Issues Regarding Tax Planning In Chinese Telecommunication Industry

The requirements of China's entry of WTO on domestic telecommunication industry are largely embodied in two aspects: the requirement of opening telecommunication market,which China government has promised to gradually fulfil,and the requirement of telecommunication regulation framework. Entry of WTO implies that member states should accept the binding force of two WTO documents pertaining telecommunication trade, namely, Fundamental Agreement of Telecommunication Negotiation and Telecommunication attachment. The two documents require that telecommunication regulation should be able to meet the principle of competition. Against this backdrop, our domestic telecommunication industry,for better survival, has to face the challenge and make adaptaton to improve its competitiveness and endeavor to maximize its profit. Only in this way can it gain advantage in market competition and be free of failure. Since net income depends on revenue and cost & expense, the maximization of net income can only be achieved by maximizing revenue and meanwhile minimizing cost and expense. However, confronted with increasingly fierce market competition, economic entity finds that there is not much internal room left to cut down its cost and expense. As a result, the actual economic income of telecommunication enterprises hinges heavily on the amount of tax burden,the external cost of economic entity. Increasing attention has been paid to how to minimize tax burden by telecommunication enterprises.Therefore,tax planning,which aims at minimizing tax burden emerges as the times require.The dissertation,directing first at the intrinsic characteristic of tax laws and rules and the status quo of permission and encouragment by goverment policy, analyzes the feasibility of tax planning for telecommunication enterprises and then expounds it significance to the operation and management of telecommunication enterprises, defines its position in business managment as subordinate to corporate development strategy. The article also gives the description of the main tax policies implemented in telecommunication enterprises and supplemental analysis and evaluation and, combining with the current tax policy and taxation regime, offers some suggestions for tax planning supported by cases. Finally, the disseratation analyzes the potential risks and provides some countermeasures to take precaution against these risks.