Tax planning is a set of planning in the area of taxation in order to improve efficiency of tax and get the best alternative for legal tax saving.
In the framework of tax management, the entity requires proper tax planning necessary for the entity. Tax planning requires an understanding of the applicable tax regulations. The goal is to determine the type of action that the tax savings will be made. In general, the emphasis of tax planning is to minimize tax liabilities.
Tax planning benefits for the entity are efficiency in cash expenditures, tax is the cost to the entity and to regulate cash flow. As such, the entity can estimate cash requirements and prepare the budget cash budget properly.