Difference Between Tax Planning and Tax Management
Paying Income Tax every year is mandatory for all taxpayers in India. It may be imposed by the Central or State Government on income, wealth or goods and services purchased by an individual. For someone who is new to paying taxes, tax planning and tax management may sound similar, and they are often used interchangeably.
But there is a huge difference between the terms. So, let's take a look at what they mean and what are some key differences between tax planning and tax management-
What is Tax Planning?
So, what is tax planning? Tax planning can be defined as the process of minimising your tax liabilities by taking advantage of the deductions, exemptions, allowances, rebates, and concessions available under tax laws. In other words, it is a legal method used by taxpayers to reduce their income tax liabilities.
For efficient tax planning, the income and financial activities of the taxpayer are closely analysed to look for various tax provisions under which the tax burden could be minimised legally. However, tax planning is not mandatory for every assessee. It is up to the taxpayers whether they'd like to take advantage of the tax-saving provisions.
What is Tax Management?
Tax management is the process deployed by taxpayers to comply with tax laws. All the tax-related aspects, such as penalties, appeals, prosecutions, and tax case settlements, are parts of tax management.
Under a tax management strategy, a taxpayer's past, present, and future tax-related activities are analysed to ensure compliance and avoid the imposition of penalties and interest. Unlike tax planning, tax management is mandatory for every assessee. Therefore, every taxpayer must comply with all the tax laws or face interest penalties.
Read Publication
WHAT IS THE GOAL OF CORPORATE LAW?
WHAT IS THE GOAL OF CORPORATE LAW?
What is the goal of corporate law, as distinct from its immediate functions of
defining a form of enterprise and containing the conflicts among the participants in
this enterprise? As a normative matter, the overall objective of corporate law—as
of any branch of law—is presumably to serve the interests of society as a whole.
More particularly, the appropriate goal of corporate law is to advance the aggregate
welfare79 of all who are affected by a firm’s activities, including the firm’s
shareholders, employees, suppliers, and customers, as well as third parties such as
local communities and beneficiaries of the natural environment. This is what
economists would characterize as the pursuit of overall social efficiency.
It is sometimes said that the goals of corporate law should be narrower. In
particular, it is sometimes said that the appropriate role of corporate law is simply
to assure that the corporation serves the best interests of its shareholders or, more
specifically, to maximize financial returns to shareholders or, more specifically still,
to maximize the current market price of corporate shares. Such claims can be viewed
in two ways.
First, these claims can be taken at face value, in which case they neither
describe corporate law as we observe it nor offer a normatively appealing aspiration
for that body of law. There would be little to recommend a body of law that, for
example, permits corporate shareholders to enrich themselves through transactions
that make creditors or employees worse off by $2 for every $1 that the shareholders
gain.
Second, such claims can be understood as saying, more modestly, that focusing
principally on the maximization of shareholder returns is, in general, the best means
by which corporate law can serve the broader goal of advancing overall social
welfare. In general, creditors, workers, and customers will consent to deal with a
corporation only if they expect themselves to be better off as a result. Consequently,
the corporation—and, in particular, its shareholders, as the firm’s residual claimants80
and risk-bearers—have a direct pecuniary interest in making sure that corporate
transactions are beneficial, not just to the shareholders, but to all parties who deal with
the firm. We believe that this second view is—and surely ought to be—the appropriate
Read Publication
What does corporate law involve?
As a trainee in the M&A group, you would probably spend a large amount of your time conducting due diligence, generally the first stage of any M&A transaction. Due diligence is the investigation to check the accuracy of information passed from the seller to the buyer or from the company raising capital to the investor. It endeavours to ascertain the financial performance of the company, the status of its assets, whether there are any outstanding debts or legal claims that could prove problematic, and whether there are any environmental, intellectual property or antitrust liabilities that could affect the value of the company going forward. Due diligence involves sifting through and reading vast quantities of paper or online documentation within a tight time frame. At times, you will be asked to travel to the client’s offices in order to conduct the due diligence onsite.
If you represent a buyer in an acquisition, there are usually two significant stages: The auction process leading up to the bid and hopefully, the acceptance of the bid; and secondly, the process leading to the eventual acquisition of the target company.
Both stages have severe time pressures, but the auction stage more so than the second stage. You will also find that your clients’ expectations of the quality of your work will be much higher during the auction stage, since there will be a lot riding on winning the bid. In the auction stage, client confidentiality is paramount. If you happen to represent the financial adviser in an acquisition, when sending out emails and other correspondence, especially en masse, it is important to ensure each recipient of the communication cannot see or otherwise ascertain who the other bidders are. If a bidder knows the identity of other bidders, or even the identity of their legal advisers, they will have a better idea as to the amount of the bid and the type of package their competitor is putting together and can trump that in order to win the bid. At the second stage, the period of most intense pressure will be shortly before closing, when doing the final negotiations of the sale and purchase contracts.
Read Publication
Guidelines for the Establishment and Liquidation of Branches and Representative Offices of Legal Entities in the Republic of Azerbaijan
Branch — a separate subdivision that operates outside the location of a legal entity and performs all or part of its functions, including representative functions.
Representative Office — a separate subdivision that operates outside the location of a legal entity and represents and defends the interests of the legal entity. Representative offices and branches are not legal entities and operate in accordance with the statutes approved by the legal entity. The heads of representative offices and branches are appointed by the legal entity and act based on its power of attorney.
Branches and representative offices cannot be legal entities for the following reasons:
They are part of a whole enterprise;
They cannot be independent subjects of civil legal relations;
They cannot directly acquire and perform legal duties and obligations.
The main difference between a branch and a representative office is that a branch has more functions. A branch performs many functions of the legal entity, including representative functions. A representative office cannot engage in activities that generate income directly but may have the authority to sign contracts.
The creation of a branch or representative office of a legal entity occurs in two ways:
When establishing the legal entity, as provided in the Charter;
Subsequently, by amending the legal entity's Charter.
The procedures for state registration and deregistration of a foreign legal entity’s representative office or branch are regulated by the Law of the Republic of Azerbaijan "On State Registration and State Registry of Legal Entities."
To register a foreign legal entity’s representative office or branch, the following documents must be submitted with the application:
Constitutive documents of the foreign legal entity;
Document confirming payment of state fee;
Notarized copy of the certificate of state registration of the founding legal entity (extract from the state register) and its charter;
Copy of the identity document of the legal representative;
Statute approved by the foreign legal entity or its authorized representative establishing the representative office or branch (must specify the name, location, registration number, registration date of the foreign legal entity that established it, the rights and duties of the representative office or branch, procedures for management and liquidation, and other matters deemed necessary by the founder);
Decision of the foreign legal entity establishing the representative office or branch;
Document confirming the registration of the legal entity establishing it — extract from the commercial register (registration certificate, etc.). These documents must be apostilled or legalized;
Original or notarized copy of the power of attorney issued by the foreign legal entity establishing the representative office or branch. These documents must be apostilled or legalized;
Original or notarized copy of the decision of the foreign legal entity establishing the representative office or branch regarding its appointment of the head. These documents must be apostilled or legalized.
The registration of a foreign legal entity’s representative office or branch, and the inclusion of a legal entity registered in Azerbaijan into the State Register of legal entities, may be refused only in the following cases:
If the documents submitted to the State Tax Service of Azerbaijan contradict the Constitution of the Republic of Azerbaijan, the Law "On State Registration and State Registry of Legal Entities," and other legislative acts;
If the protection of company names' rights is violated or if an unincorporated organization with the same name has already been registered;
If deficiencies found in the founding documents by the State Tax Service are not rectified within 20 days.
When a foreign legal entity’s representative office or branch is dissolved in accordance with legislation, and the liquidation procedures are completed, an application must be submitted to the State Tax Service of Azerbaijan for removal from the registry.
The application should include:
Liquidation decision;
Balance sheet or tax declaration approved by the State Tax Service of Azerbaijan;
Results of the latest tax inspection by the State Tax Service;
Original and seal of the certificate of state registration and the charter of the entity;
Document confirming publication of the dissolution notice in the press;
If the legal entity is dissolved through reorganization, a copy of the act of delivery or balance sheet, excluding the balance sheet or tax declaration, and the latest tax inspection results;
Other documents as provided by legislation.
The application must be signed by the founders or authorized members of the liquidation commission and submitted together with a copy.
After the necessary documents are submitted, the Ministry of Taxes of the Republic of Azerbaijan reviews their compliance with legal requirements. If no deficiencies are found, the Ministry shall make a decision to remove the entity from the register within 7 days from the date of receipt of the application.
Read Publication
Русский 
Türkçe 
中文 
Azərbaycanca 