SME Tax Risk Management

Nowadays small and medium-sized enterprises has become a vital part innational economy development, whose number is far larger than large enterprises andis becoming the nucleus power of economy development. However, fast-developingsmall and medium-sized enterprises will definitely bring a series of internal taxationrisks, mainly in the following aspects, taxation pressure increases, internal riskconsciousness is becoming weaker, most of enterprises choose extensive managementmodel without enough attention on taxation risk problems, which result in theoccurrence of various taxation-related risks.According to domestic and overseas documents related to taxation risks, theauthor finds that foreign studies on risk management are relatively in high quantitywith a series of research findings because of its early born and large developmentscale at a mature stage of enterprise development. Nonetheless, domestic enterprise isunder infant stage, relevant scholars have few research findings about taxation riskmanagement, let alone researches on small and medium-sized enterprises.This essay includes five chapters, the first three chapters are analysis of relatedtheories: to begin with, introduction part includes research background andsignificance、documents summary、research methods and structure、topic’s innovationand deficiency; besides, analyses taxation risk management through theories; finally,analyses the current situation of small and medium-sized enterprises’ taxation riskmanagement as well as the definition of enterprises. The fourth chapter focuses onanalyzing the reason of taxation risks, in terms of internal reason, use game theory tobuild related theory model and comes out with optimal strategy, under theprecondition of two rational agent; as for external reasons, the author concerns abouttaxation risks from tax law’s defects、tax management process、 changes on taxregulations.The uncertainty of external reasons is one reason of taxation risks, butconcerning it is unavoidable, the author chooses internal reasons as research keypoints.The last chapter puts forward measures for small and medium-sized enterprises’taxation risk management, according to COSO risk management structures on the basis of risks. The author chooses quantitative analysis method and simple solutionselection to compare expected values, variance, variable coefficient between varioussolutions, then reaches the best management solution.The author learns from domestic and overseas research findings, starting formtheory illustrations to reference data collection to find guiding ideas for thedevelopment of enterprises, in further to form a frame model for small andmedium-sized enterprises’ taxation risk management.