Definition
A financial process is said to be tax efficient if it is taxed at a lower rate than an alternative financial process that achieves the same end.
Tax Efficiency
What is ‘Tax Efficiency’
Tax efficiency is an attempt to minimize tax liability when given many different financial decisions. There are a variety of ways to obtain tax efficiency, including selecting tax efficient vehicles such as many exchange traded funds (ETFs) and municipal bonds, locating assets in the accounts such as Traditional or Roth IRAs and offsetting taxable capital gains with capital losses.
Explaining ‘Tax Efficiency’
Choosing the best tax-efficient investment can be a daunting task for those with little knowledge of the different types of products available. The best decision may be to contact a financial professional to determine if there is a way for you to make your investments more tax efficient.
Further Reading
- State Ownership, Preferential Tax, and Corporate Tax Burdens [J] – en.cnki.com.cn [PDF]
- Tax efficiency in selected Indian states – link.springer.com [PDF]
- The collection efficiency of the Value Added Tax: Theory and international evidence – www.tandfonline.com [PDF]
- TAX EFFICIENCY AND QUALITY/QUANTITY TRADE‐OFFS IN DEFENSE PROCUREMENT – www.tandfonline.com [PDF]
- Do active fund managers care about capital gains tax efficiency? – www.sciencedirect.com [PDF]
- Size does matter: technical and scale efficiency in Indian state tax jurisdictions – onlinelibrary.wiley.com [PDF]
- Neutrality and efficiency of petroleum revenue tax: A theoretical assessment – academic.oup.com [PDF]
