Corporate tax planning requires strategic structuring of business operations to minimize liabilities and chartered accountants play a crucial role in it. Big corporations have a complex accounting mechanism and they hire qualified and experienced chartered accountants for technical advice in the matters of corporate tax planning. The important aspect involves the imposition of taxes on corporate activities by several authorities in a country where the company is located. Held a corporate activities that can contribute in environment like cleaning the environment and planting more trees.
Listed below are a few steps that can guide you to carry out efficient corporate tax planning at your company
It can be better managed by hiring the services of an experienced accounting firm with a team of qualified chartered accountants who can guide you about reducing the liabilities of your company in a year. The firm will advise you on how to utilize the exemptions, deductions, and benefits in the best possible way for minimizing your financial burden in a legal manner.
There are various sections under the income tax act that reduce your corporate tax liabilities such as exemptions and tax credits. Your chartered accountant will guide you on how to structure your corporate tax planning inside the frameworks defined by respective authorities to make it fully legal and mitigate the risk of evasion and the imposition of penalties.
Deductions are the best way of reducing liabilities on a registered company within the framework of law and should be an integral part of the corporate tax planning. This includes deductions on health insurance of employees, retirement planning, charitable contributions, office expenses, and business transport. A company can substantially reduce its tax burden in a legal way through the various tax deductions and exemptions provided under the income tax act.
A robust corporate tax planning by an experienced chartered accountant reduces the tax liabilities of a company as he assists in meticulous planning of capital budget, sales, and marketing costs, planning of expenses and reducing the burden of direct and indirect taxes during times of inflation. Your chartered accountant updates you with changes in the taxation laws, provides correct information to relevant income tax departments and authorities and does complete legal planning under the purview of the law.
Corporate tax planning must be done with business objectives in mind and should be flexible enough to incorporate possible changes in the future. The primary objectives of corporate tax planning should be economic stability of the company, reduction in overall liability, minimization of litigation and productive investment.
Corporate tax planning must cover several considerations like the timing of income, timing of purchases and planning for other expenditures. Also, the selection of investments and types of retirement plans must complement the return filing status and deductions to create the best possible outcome. It must focus on reducing the tax liability by making optimum use of all permissible allowances, deductions, concessions, exemptions, rebates, exclusions and so forth, available under the statute. Additionally, it should be done in such a way that complete benefit can be availed by legitimate means by making use of all beneficial provisions and relaxations provided in the law.