The impact of labour tax costs on the company strategic decision making and internal action plan to control tax payment in the company

The company sustainable development is closely linked with the control of expenses and the ways how to reduce its impact on company cash flow. In Baltic countries business environment is becoming less attractive as a result of tax burden. It encourages tax payers to seek alternative solutions for the reduction of tax burden, especially in relation to labour tax costs and its impact on company cash flow. The article focuses on the assumption that the impact of labour tax costs on business environment in Lithuania and Estonia is much more favourable than in Latvia. Having evaluated labour costs and taking into consideration that they occur under the same production conditions in each of the Baltic countries, we can draw the conclusion that such assumption is false. It cannot be applied in strategic decision making and internal action plan design. When developing tax planning strategy in companies by considering which taxes create the heaviest tax burden, as well as by looking at the ways how it affects investment and company expenses, the calculations have been carried out that lead to the conclusion that tax policy in all Baltic countries and its impact on business environment is similar. Therefore, strategic decision to move business from one territory of the country to another country could turn out to be inefficient. Such decision does not refer to internal action plan of controlling tax payment administration in the company. The analysis indicates significant differences in administration of national taxation.