Abstract: The choice of organizational form based on considerations of taxes is also called the tax planning of optimal organization form, i.e. to choose certain kind of organizational form to seek the most effective tax planning decision. Tax costs and non-tax costs are the major factors affecting the effective choice. If non-tax costs are not considered, the economic model of preference choice of organizational forms is mainly affected by such variables as the enterprise income tax rate, the personal income tax rate on equity transfer or business earnings, and so on. Other important factors in the non-tax costs affecting the economic model include the switching costs, costs of losing non-tax advantages, costs of coordination and communication, and so on.

Key words: tax cost; non-tax cost; organizational form; tax rules