Welfare : Tax Planning Tool

Abstract

          This article discusses the concept of welfare and its relation to tax burden. The article highlights the importance of good welfare practices, which can serve as a motivator for employees, meet their needs, and increase efficiency, savings, and convenience. The article also notes that the tax burden related to welfare can be significant and outlines different types of taxes that may apply, including personal income tax, withholding income tax, corporate income tax, and VAT.
          To help reduce the tax burden, the article suggests six important strategies in welfare tax planning. These strategies include providing welfare and benefits that are not subject to tax and can be deducted as expenses, providing welfare and benefits in an amount greater than what is actually paid, correctly withholding and remitting income tax, calculating taxes in an infinite decimal form for executives and employees at all levels, and having a written agreement for tax issues. It can be concluded that the provision of welfare can help to reduce the tax burden and to save taxes on both the part of the giver (employer) and the recipient of welfare (employee), so it can be considered that the welfare arrangement is an extremely important tool in the organization's tax planning.