Tax optimization, tax optimization, tax optimization – reducing the size of the tax liability through targeted and lawful actions of the taxpayer, including the use of all benefits granted by the current legislation, tax exemptions and other legal benefits. Taxpayers often have no idea of the tax potential of their business, although reasonable optimization and tax minimization would allow many to make effective taxation much smaller.
Reducing the tax burden of both the holding as a whole and the individual enterprise, carried out through the use of certain tax instruments and mechanisms, such as: special tax regimes and benefits, as well as other legal and economic methods permissible in specific cases.
Tax optimization and business protection are still the two most popular requests from business representatives. Minimizing tax costs can be achieved by absolutely legal methods. At the heart of optimizing the tax burden and minimizing tax costs is the ongoing planning of tax costs. Many mistakenly mix such different concepts as tax planning, minimizing them and of course optimizing them, as well as tax evasion.
It should be taken into account that a reduction in tax payments does not always lead to a reduction in costs and an increase in the profit of the enterprise. At the same time, such a connection is often not direct and indirect. Thus, a reduction in one tax or levy may lead to an increase in other and in addition to the application of financial sanctions by the regulatory authorities.
Principles of tax minimization and optimization
We believe that the taxpayer should not pay extra taxes, that this approach is destructive to business (and the state, ultimately);
We believe that the taxpayer should know their rights and use them to legally reduce the tax burden;
We believe that every business is unique and only targeted, specially selected solutions can optimize its taxation and tax risks;
We are confident that we can help you in any situation: reduce the risks of your business and allow you to spend more efficiently.
If you believe it too or do not believe it yet, but would like to make sure, we will be happy to help you.
Our recommendations are always based on the practice of resolving issues in tax disputes, and we always assess the practical implications for business. We thoroughly investigate the business of clients and do not offer solutions that could not be subsequently protected before the tax authorities. We always follow the needs of your business and your vision of its future.
Is tax optimization dangerous? No, it’s not dangerous. Moreover, the danger is the lack of optimization of tax payments – it can bankrupt the business, depriving it of opportunities for development. At the same time, we are not talking about illegal optimization of the taxation of the company or the person – banal tax evasion, by underestimating tax payments. We are talking about legitimate ways to optimize tax payments – available means of tax minimization and optimization.
Tax optimization tools
It is a myth that optimization of company taxes is impossible in a legal way, moreover, it is an unfounded myth. Tax law presents many opportunities to optimize the tax system using:
- tax breaks and preferences;
- Tax deductions
- preferential tax regimes (optimization of the tax system);
- Additional tax ratios
- Special tax zones and investment benefits;
- and other tools.
Sometimes, to achieve a significant tax effect, it is enough to reformulate several significant contracts or provisions of accounting policy, in other cases it is necessary to change the entire system of cash flows in the company.
It is worth noting that tax optimization is not a one-off process – Russian legislation regularly changes, reduces the number of tax benefits and exemptions, and patches “holes” in the legislation, so it is necessary to analyze options for reducing the tax burden regularly.
Tax optimization conditions
Tax optimization is a complex work that requires a thorough study of the client’s business, analysis of possible tax risks and existing practices, joint work of lawyers and economists who are qualified in taxation. No action on the effectiveness of taxation can be considered in isolation from the economic nature of business, other taxes and cash flows in general (for example, an increase in income tax costs can lead to an increase in VAT, distort the balance sheet or make the company less attractive to investment). The slightest mistake in the tax optimization of the organization will not only lead to the opposite effect – an increase in taxes, but also can lead to sanctions – fines and penalties. That is why in order to effectively optimize the tax burden, the company needs the participation of the most experienced professionals who have repeatedly applied their knowledge in practice.
We offer a wide range of services to unlock the tax potential of your business, in particular:
- recommendations on the efficient use of benefits, deductions, VAT reimbursement, optimization of tax systems and other means of tax optimization;
- Analysis and recommendations on the ownership structure of the business in order to optimize the taxation of net profit when paying its shareholders;
- optimization from a tax point of view of the relationship of business elements with each other – (optimization of contractual relations and balancing prices in the transaction system);
- selecting the region for activities taking into account regional tax benefits and special zones.
Projects to optimize the effective tax rate are probably the most difficult projects for us, but therefore they are also our favorite projects. We will be happy to provide you with all our experience and knowledge, please contact.