Taxes and Business Strategy

Course leader: Dr Sebastian Lazar

Home institution: University Alexandru Ioan Cuza of Iasi, Romania
 

Course pre-requisite(s): Fundamentals of Corporate Finance

Course Overview

In a world of ever increasing competition, mastering the fundamentals of corporate finance, financial valuation, risks and investments is not enough. To gain a competitive advantage, the students need to go deeper into integrating the hot topic of taxes into business decision making process. Taxes can have a dramatic impact on after-tax cash flows and knowing how to arrange transactions in order to maximize after-tax cash flows is a skill that certainly makes the difference among finance students. The course bridges the gap between taxation and corporate finance by providing a planning approach to taxes, business and investment planning. Students learn to integrate taxes into the business decision making process and understand how taxes affect the business behavior. They gain a significant competitive advantage over students who know little or nothing about taxes.

Learning Outcomes

At the end, students are able to explain the tax consequences of business choices and operations, to legally arrange transactions in order to maximize after-tax cash flows, and to use tax information to optimize business and financial decisions.

Course Content

Exploring the Tax Environment Policy Standards for a Good Tax

Taxes as Transaction Costs

Maxims of Income Tax Planning

Taxable Income from Business Operations

Property Acquistions and Cost Recovery

Deductions Property Dispositions

The Choice of Business

Entity Personal Income Taxation

Compensation and Retirement Planning

Instructional Method

The course will be taught through lectures and seminars. A special focus will be on the applications concerning tax planning cases. in order to solve the problems, the students should be already familiar with performing a discounted cash flow analysis and applying the NPV criteria.

Required Course Materials

Jones, Sally and Shelley Rhoades-Catanach (2016), Principles of Taxation for Business and Investment Planning, 2016 Edition, McGraw-Hill/Irwin.

Assessment

The assessment consist in two short tests with open questions. The first test will be held at the end of the first 4 chapters and will provide students a feed-back on the general issues of taxation as corporate planning tool, while giving the teacher an understanding on how well students master tax issues in order to better design and adapt the next chapters. The last test will be held at the end of course from the remaining chapters and is meant to evaluate the overall progress and advance of students. The test will comprise both theory and applications