The OECD (Organization for Economic Co-operation and Development) working definition of a tax is a compulsory unrequited payment to the government (oecd.org). Nowadays, tax agencies pay much attention to the items contained in the Profit and Loss Statement of taxpayer and balance sheet items and financial situation is less. However, production factors are generating revenue to the taxpayer and should be paying more attention to them. These factors should not be damaged in the process of taxation.
In essence, land, labor, capital and entrepreneurship encompass all of the inputs needed to produce a good or service. Land represents all natural resources, such as timber and gold, used in the production of a good. Labor is all of the work that laborers and workers perform at all levels of an organization, except for the entrepreneur. The entrepreneur is the individual who takes an idea and attempts to make an economic profit from it by combining all other factors of production. The entrepreneur also takes on all of the risks and rewards of the business. The capital is all of the tools and machinery used to produce a good or service (source: investopedia.com).
Therefore, it is recommended that tax administrations look beyond the legal structure and tax calculations and consider the totality of economic activity of taxpayers.