Research on the multinational group profit planning based on minimization of tax burden

While making profit plan, the multinational corporations often reduce the profits of enterprises with heavy taxation burden according to taxation burden of subsidiaries, and transfer the reduced profits to the enterprises in which the taxation burden is light. This simple complementary approach to profit planning is not only constrained by the restriction of the volume of business between subsidiaries and the cost of transferring profits, but also more importantly is constrained by restricting factors such as tax authority´s anti-avoiding taxation so that the resulting effect of profit planning is not excellent. On the basis of analyzing spatial profit planning, multinational corporations make a decision considering the objectives and restrictions of tax minimization, establishing a non-linear programming model, solving the optimal limit of profit-shifting and determining the optimal tax planning program. Taking Lenovo Group for example, inspects the validity of the model.