3 tips for effecting good tax planning

We have mentioned in this Albieri and Associates blog that the proper management of the accounting, tax and financial departments is essential for your company’s success. Indeed, within these areas, tax planning has risen to prominence over the last few years because – in addition to generating improved financial efficiency in the company’s business – it can help avoid unnecessarily paying money for taxes that could be saved and can also allow unduly paid amounts to be recovered and over the last 5 years.

So, if you’d like to work with plans to reduce your tax burden and increase your company’s profits in an effective way, take a look at a few of the tips that we’ve set aside for you to carry out good tax planning. Take a look here:

Dedicated team and setting goals

Robots have not yet been invented, at least to our knowledge, that can replace good analysts in performing good tax planning. As such, an important decision company managers need to make is on investing in a staff (which can start with only one person) that is totally dedicated to tax analysis and improving the efficiency of the company in this area. Another way is to hire a financial consultant through outsourcing companies specialized in this regard.

It’s rather important that this person or provider does not get involved with the day-to-day affairs of the department and that the company establishes saving goals that need to be reached. At the end of a year of work, the business owner and company executives will verify that the costs initially involved will be easily surpassed by the savings generated. Take a test, find out more about the advantages of outsourcing the financial department here.

Taxes in the supply chain

One of the most effective ways to check if there are any unnecessary expenses related to taxes is by carrying out tax planning and, as such, analyzing the supply chain of your company. Some questions such as: can material be acquired from another state and save me money on taxes? Are we taking the credits correctly from the purchases done? Is it more advantageous to purchase certain goods directly from the industry or distributors? Are services embedded in the prices of purchased products or materials? Are my suppliers carrying out the proper calculation of the taxes that are arriving in their invoices?

When viewed analytically and simulating different scenarios, these questions surely spawn results and conditions to renegotiate contracts and adjust internal registrations that can offer tax savings to the company and improve the margins on products and services sold.

Items registration

Having a well-managed item registration is key to a company’s tax efficiency. If it is a service provider, the same applies to registering services.

In addition to the rates to be associated with each item, it is crucial to check on the possibilities of commercial transactions that can be made with a particular product. For example, sale for industrialization, sale for the purpose of resale or use and consumption, transactions within and out-of-state, origin of the merchandise (domestic or imported), and countless others. Each commercial transaction can generate distinct tax charges and burden the price of the product sold or, conversely, create company contingencies due to incorrect tax collections.

Three points are very important when it comes to registration: (1) constant updating based on amendments to the law, (2) centralization of its maintenance, and (3) closeness and discussions with business areas.

If you’d like to know more about tax planning and how to perform it better, take a look at the tips on our blog or contact our staff.