The governments of some counties use the taxation system to promote investment. Taxation laws are enacted to encourage domestic and international corporations to either invest or rise capital, and tax break are given to specific industries or to train types of expenses to attract investors and consumer. As a result of these taxation measures, there is significant scope for taxation planning in some countries and companies would be well advised to use such opportunities to structure their business in the most tax effective manner.
For effective taxation planning, companies rely on tax specialists who must have an excellent understanding of both their clients’ business and the various taxation laws. Companies turn to their tax advisers for help on all the taxes for which they are liable, such as income tax, sales tax, property tax and payroll tax. These tax specialists are normally Chartered Accounts and CPAs who are not only involved in the preparation of tax returns (compliance), who also give advice on a multi-national company’s domestic and foreign operations (consulting). Furthermore, they represent their clients before the tax authorities.