CORRELATION OF THE CONCEPT OF “TAX PLANNING” WITH RELATED TAX AND LEGAL CATEGORIES

Author
, Graduate student at the Department of Financial Law, Ukraine, Kharkiv

In heading

 Law;

Signed print

 25.03.2025

Issues number

 2025 - № 1 (60)

Page

 82-96

Type of articles

 Scientific article

Code UDK

 347.73:336.225.61

ISSN print

 2411-5584

Abstract

 Problem setting. In the modern tax-legal discourse, a clear theoretical and practical distinction between the concepts used in tax legal relations, in particular “tax planning”, “tax evasion”, “aggressive tax planning”, “tax liability optimization”, “tax compliance”, is taken on particular importance. Disclosing the correlation between the concepts of “tax planning” and “tax compliance” is not only a scientifically sound task, but also has important implications for the formation of a transparent, fair, and effective tax system and tax administration system in our state.
Recent research and publication analysis. Many scientists and practitioners have managed to identify the problems of tax planning and tax compliance and ways to solve them. Modern scientific and applied sources reveal the content of tax planning, its levels, characterize tax compliance and its role in ensuring the effective functioning of the tax system of Ukraine.
Paper objective. The purpose of the article is to correlate the concept of “tax planning” with related categories using the example of outlining similarities and differences with the concept of “tax compliance”. This goal involves completing the following tasks: researching tax legislation for the purpose of the regulatory definition of the concepts of “tax planning” and “tax compliance”; outlining the opinions of scientists regarding the definition of the concepts of “tax planning” and “tax compliance”; determining the connection between them.
Paper main body. By comparing the concepts of “tax planning” and “tax compliance / compliance”, the following common features can be distinguished:
– by level of implementation: they have a public and private component, as they can be implemented both by the state regulatory authorities and taxpayers; – by purpose: the general goal is compliance with current tax legislation; a special goal in content: the public component is aimed at taxpayers’ compliance with current legislation and, accordingly, filling budgets; the private component is reducing the tax burden, optimizing the taxation process, reducing tax risks, analyzing and predicting possible and existing consequences of tax risks;
– by the scope of implementation: they provide for a set of measures exclusively within the framework of current tax and other legislation, the control over compliance with which is carried out by regulatory authorities.
Regarding the difference between these concepts, firstly, the concept of “tax planning”, unlike “tax compliance / compliance”, is not defined by the Tax Code of Ukraine and, accordingly, is not enshrined as a legal right of taxpayers. At the same time, “tax compliance / compliance” according to the Tax Code of Ukraine is named one of the functions of regulatory authorities. At the same time, the legislator has not established the right and / or obligation of taxpayers to implement compliance.
Secondly, tax planning is seen as having a broader meaning as opposed to tax compliance/compliance.
Thirdly, there is a difference in tools: for tax planning these are strategies, contracts, and structuring of transactions, while for tax compliance these are regulated internal procedures, reporting, and timely payment of taxes.
Conclusion of the research. In conditions of martial law and limited financial resources (for both of taxpayers and the state), ensuring revenues to public funds and accumulating private resources through conscientious tax behavior of authorities and obligated subjects of tax relations is critically important. It is obvious that tax compliance and tax planning in this context can jointly create a favorable environment for predictable, stable, timely tax payment. These two concepts are interrelated: effective and transparent tax planning is possible only if the requirements of tax legislation are properly observed, that is, a high level of compliance.
The concepts of “tax planning” and “tax compliance” coincide in terms of implementation levels (subjects), purpose and boundaries. Their interconnection appeares in a common general goal, the application of a risk-oriented approach, and strengthening the taxpayers’ good faith. But these are not identical concepts, although complementary, which, when properly applied, ensure a balance between the public interests of the state and the private interests of the taxpayer in terms of optimizing their expenses as the owner of funds.
Short abstract for an article
Abstract. The correlation of the concepts of “tax planning” and “tax compliance”, which is becoming especially relevant in the context of the transformation of the tax system of Ukraine and the introduction of a risk-based approach to tax administration is carried out. It is stated that the absence of the definition of “tax planning” in the current tax legislation of Ukraine creates legal uncertainty for both taxpayers and regulatory authorities. The relevance of distinguishing such related categories as “tax planning”, “tax evasion”, “optimization”, “tax compliance”, etc. is emphasized. Legislative norms, scientific approaches to definitions, and the practical significance of concepts for the state and the taxpayer are analyzed. It is substantiated that both tax planning and tax compliance can be implemented by both taxpayers (at the micro level) and regulatory authorities (at the macro level). Both phenomena have a common goal – compliance with tax legislation, but differ in functional content, implementation tools, boundaries, and legal nature.

Keywords

 tax legislation, tax system, tax administration, tax optimization, regulatory authorities, taxpayer, compliance risks, good faith, tax offense, tax evasion.

Reviewer

External reviewer

Article in PDF

 Economic Theory and Law, 1-2025-82-96

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Code DOI

 https://doi.org/10.31359/2411-5584-2025-60-1-82

This post is also available in: Ukrainian

25.03.2025