Posted in Finance, Accounting and Economics Terms, Total Reads: 282
Definition: Tax Efficiency
Tax efficiency is the process of selecting investments from a set of different financial decisions in order to minimize the liability that one has towards taxes to be paid. A lot of financial products are available in the market that helps in achieving tax efficiency. For example tax efficient mutual funds, irrevocable trusts, tax exempt commercial papers etc.
Selecting the best tax efficient investment among all the investments available in the market can be seen as a difficult task for investors that do not have much knowledge about the different products available in the markets.
In such cases it is generally advisable for the investor to contact a financial professional to know if there is a way of making one’s investment more tax efficient.