Conflicting interests arise for many businesses where decisions
have to be made to determine how they consistently achieve
profitability, while on the other hand minimise payment of tax. The
temptation to minimise profits or even make a loss then becomes a
tax risk management strategy. Some businesses that are aggressive
tax planners employ several methods some of which do not resonate
with ethical business practices. Many organisations are involved in
avoidance which by the way is not very different from evasion. If
you ask me; they both involve scheming and dodging.
Creation of tax losses may be seen in some cases where interest
payments are made in relation to borrowings from a parent company;
in other instances, prices at which raw materials or equipment are
transferred to group members are fixed; and in others, the costs
charged by shared service centres are too high. Those especially
not part of a group may for example include personal expenditure
within the
