Module I·Article II·~2 min read
Tax Planning: Legal Methods of Optimization
Fundamentals of Taxation
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Three Levels of Attitude Toward Taxes
Tax Evasion — the illegal concealment of income or property. Criminally punishable. Examples: not recording revenue in the cash register, fictitious expenses.
Aggressive Tax Planning — using loopholes and inconsistencies in the legislation to reduce taxes in ways not consistent with the legislator’s intent. Formally legal, but increasingly pursued by regulators (BEPS, GAAR).
Tax Planning — legal optimization of the tax burden through the use of benefits, deductions, and special regimes explicitly provided for by law. Absolutely legitimate.
Tax Planning Tools in Russia
Choice of tax regime: Sole proprietor or LLC on the general system vs simplified tax system (6% on income or 15% on income minus expenses) vs patent system for sole proprietors vs professional income tax (4-6%).
Investment tax deduction: deduction up to 90% of expenses for R&D, equipment modernization in a number of regions.
Tax holidays: for newly registered sole proprietors in certain regions.
Special Economic Zones (SEZs): reduced corporate profit tax and VAT rates for residents.
Expenses reducing the tax base: timely recognition of expenses, depreciation, creation of reserves.
The Business Purpose Doctrine
Tax authorities (and courts) apply the business purpose doctrine: if a transaction has no purpose other than tax optimization, the tax consequences may be revised.
Russian equivalent: the concept of "unjustified tax benefit" (Resolution of the Plenum of the Supreme Arbitration Court No. 53, Article 54.1 of the Tax Code of the Russian Federation). Signs of unjustified tax benefit: formality of document circulation, absence of a genuine business purpose, deliberate actions to evade.
Practical Assignment
A self-employed designer earns 3 million rubles per year. Compare three options: (1) remain self-employed (professional income tax 6%), (2) register as a sole proprietor (simplified tax system 6%), (3) open an LLC (general system). For each, calculate: tax burden, social contributions, final "take-home" amount.
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