Growing up with excellent results depends on knowing how to carry out intelligent tax planning. With an extremely complex tax system, companies must seek qualified advice to solve this issue that is present in day-to-day business management.
Tax planning is a tool that seeks to study in detail the taxes that companies pay, in addition to analyzing ways to adopt legal mechanisms (tax avoidance) to reduce the tax burden on their operations.
It includes measures applied to reduce or even eliminate taxes and thus generate a significant and positive impact on the results of the organization.
This procedure, which brings many benefits, is essential to maintain good financial health and legality. In this article, you will learn about and analyze the possibilities of tax planning, indicating ways to transform the financial reality of accounting offices and the practice of accounting services.
Whether for companies in a crisis or an advantage, planning allows for significant possibilities, such as increased profit margins, reinvestments, increased profit distribution, and greater allocation of reserves, in addition to other benefits.
Let’s now follow the steps to execute good tax planning in your company.
- Gather an interdisciplinary group
Don’t try to do tax planning yourself. A team is needed that can assist in various aspects. It is worth noting that, in addition to accountants, it should include professionals who understand the operations, processes, deadlines, and purchase and sale of goods.
- Collect information
To start planning it is necessary to have all the company’s information at hand.
- Company size and structure
- Current tax framework
- Invoicing
- Services are taken by the company
- Operational expenses
- Investments
- Corporate framework, among others
This is basic information that will be extremely useful in tax planning. With these collected data, it will be possible to define all the stages and the variables that concern the economic and tax activities of the company.
- Set a timeline of steps
Now that you’ve chosen the team and gathered information, it’s time to define the steps and responsibilities of each team member. In addition, it is necessary to control this schedule so as not to run the risk of not meeting it or doing it poorly.
What are the benefits of tax planning?
After learning how to carry out tax planning, check out some of its advantages:
- Helps organize the taxes that must be paid;
- Decreases costs of fines and interest;
- Helps meet tax obligations;
- Provides an understanding of tax scenarios;
- Provides an understanding of the impact of taxes on business profitability;
- Allows for more accurate pricing.
Conclusion
We can say that no matter the size of your business, tax planning is an important path to follow for a lower tax burden.
However, a warning: this type of analysis mustn’t be confused with tax evasion, because with it, it is possible to choose, between two or more legal options, the one that results in the lowest tax cost.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.