Abstract:

The instruments of state influence concerning tax payers include, among others, various tax burden reduction mechanisms incorporated into the system, also known as tax expenditures. They constitute an acceptable exception from the tax standard and the tax payer’s reaction to a specific stimulating tool is limited to choosing one of the alternatives specified in the act. Using the right of choice, specified by the given tax expenditure, meets the prerequisite to deem such tax payer’s conduct as incorporation of a tax strategy aimed at tax minimisation.

The tax strategies based on the right of choice includes three strategy groups: strategies allowing for tax burden postponement, strategies allowing for reducing the tax base in periods other than those specified in the general rules, strategies allowing for definitive income tax minimisation using one or more rights of choice.

A specific feature of tax strategies based on the right of choice is their universality, because all tax payers have the undisputable right to minimise the income tax, provided that it is done in the manner and on the terms specified directly in the act. This means that the strategies are viewed in tax terms as safe strategies and the risk of their implementation is limited mainly to the general risk related to the company’s market functioning in a specific economic reality. The only negative aspect is that the number of rights of choice constitutes a limited catalogue and the opportunities of income tax minimisation through the incorporation of tax strategies based on the right of choice are limited.