Jan-Apr 2013

Department of Accounting & Information Systems University of Dhaka

MBA (Evening) Program

Course Outline
Course # 6102: Corporate Tax Management Course Teacher: Prof. Dr. Swapan Kumar Bala, FCMA Office Room # 331, Business Studies Bhaban Tel: 9661920-73/7891 (Off), 7910 (Room); 8619847 (Res) Cell: 0171437781 E-mail: bala_swapan@yahoo.com Course Objective:
The objective of the course is to acquaint the participants with the implications of both direct and indirect tax laws with a view to integrating the relevance of the laws with corporate profit planning and managerial decision-making.

Classroom: 208 Schedule: Day: Sunday Time: 6.30pm to 9.30pm

Class Schedule:
Sessio Topic on Corporate Tax Management n # 01-03 Corporate Tax ManagementAn Introduction: Definition of Corporate Tax ManagementCorporate Tax FunctionsTax evasion, avoidance and planningTax formula and Traditional tax planningTax planning under the ScholesWolfson ParadigmEffective tax planning vs. Tax avoidanceKey aspects of effective tax planningWhy study corporate tax planning?Taxing authority in tax planningTraditional tax planning techniques (principles, relevant tax rate, factors affecting, functional variables for final tax liability, tax planning opportunities under IAS 12, restrictions on tax avoidance) Why Tax Planning ArisesTypes of tax planningTax vs. Financial management decisions (investment, financing and dividend)Tax planning as tax-favoured activityImportant concepts for Tax PlanningSAVANT Framework for Strategic Corporate Tax Planning, # 04 Tax Law Fundamentals: Details on types of tax planningRestriction on income shiftingSocially undesirable economic activityTax law ambiguityTypes of restrictionsCosts of imposing restrictions Legislative prohibitionsJudicial prohibitionsLegislative process and sources of tax information. # 05 First Mid Term Test Intertemporal Tax Planning [using alternative Savings Vehicles]: # 06 Returns to alternative Savings VehicleDistinguishing Alternative Savings Vehicles Dominance Relations and Empirical Anomalies Changes in Tax Rates over time. # 07 Choosing the Optimal Organizational Form [Inter-entity Tax Planning]: Forms of business vs. Tax paying entity: Taxpayers status, Levels of taxationDouble Taxation for Corporate Income: When?Changing Preferences for Organizational Forms Induced by Tax-Rule ChangesOther organizational forms for organizing production activitiesNon-Tax Advantages of Operating in Corporate Form. # 08-09 Implicit Taxes and Clienteles, Arbitrage, Restrictions, and Frictions: Tax-Favored Status and Implicit TaxesImplicit, Explicit and Total Tax RatesImportance of Adjusting for Risk DifferencesClientelesImplicit Taxes and Corporate Tax BurdensTax ArbitrageOrganizational-Form ArbitrageTax ArbitrageClientele-Based Arbitrage. # 10 Second Mid Term Test

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Jan-Apr 2013
Sessio Topic on Corporate Tax Management n # 11-12 Nontax Costs of Tax Planning Information Asymmetry, Transaction Costs, Identification Problem, Uncertainty, Hidden Action or Hidden Information SituationsSymmetric Uncertainty, Progressive Tax Rates, and Risk TakingTax Planning in the Presence of Risk-Sharing and Hidden-Action ConsiderationsTax Planning in the Presence of Hidden-Information ConsiderationsTax Planning and Organizational DesignConflicts Between Financial Reporting and Tax Planning. # 13 The Importance of Marginal Tax Rates and Dynamic Tax Planning Considerations: Marginal Tax Rate: Definitional IssuesAverage tax rate vs. Effective tax rateAdaptability of Tax PlansReversibility of Tax PlansAbility to Insure Against Adverse Changes in Tax Status. # 14 Corporate Compensation Planning: Factors for Relative Desirability of the Compensation AlternativesSalary vs. Deferred CompensationSalary vs. Fringe Benefits. # 15 Multinational Tax PlanningIntroduction and Investment Decisions: Differing dimensions of foreign and domestic tax systemsVariation in tax laws across countriesOverview of Multinational Taxation (Approaches to taxation of foreign income, Foreign tax credit under worldwide tax systems, Costs and Benefits of a Uniform Set of Tax Laws for International Taxation, Foreign Subsidiary vs. Foreign Branch)How taxes affect the location and structure of investments. Presentation & Review of Classes

Books Recommended as Text: 1. Myron S. Scholes, Mark A. Wolfson, Merle Erickson, Edward L. Maydew and Terry Shevlin. 2002. Taxes and Business Strategy: A Planning Approach. Upper Saddle River, New Jersey: Prentice-Hall. Reference Books: 1. John E. Karayan, Charles Swenson and Joseph W. Neff. 2002. Strategic Corporate Tax Planning. Hoboken, New Jersey: John Wiley & Sons, Inc. 2. R. N. Lakhotia and S. Lakhotia. 1998. Corporate Tax Planning. New Delhi: Vision Books.

Assignment: Individual HAND-WRITTEN submission

(1) Sources of Tax Information in Bangladesh (2) Deferred Taxation regarding Accelerated Depreciation in Bangladesh

Term Paper: Group-wise submission

Topic: Implications of Corporate Dividend Policy on Corporate Taxation Instructions: Select as many companies as the number of students in a group. Select only listed companies in a particular sector. Collect the published annual report of each company for the latest year, i.e., 2011-12 (if financial year) or 2012 (if calendar year).

Supporting Materials:
Income Tax Ordinance 1984: Sections relating to dividend payment or dividend income:

Sections 16B, 16C, 18(3), 46B(4)(b), 46C(3)(b), and 54. Paragraphs 11A and 22A of Part A of the Sixth Schedule The Finance Act 2012 (Schedules for Income Tax Rates)
Last Date of Submission: 03 April 2013.

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