Tax Planning :-

The concept of tax planning and the importance of tax planning and the role of tax planning in reducing the tax burden on your company to the maximum degree in safe legal ways

Tamer mohamednosair - • Tax services and everything related to taxes

Tax Planning : -

One of the most troublesome issues for individuals and companies is taxes, and why not, which are deducted from their money and do not feel its return directly, and everyone is looking to reduce that tax as much as possible or get rid of it without falling under the law, and one of the most important and best ways to reduce tax is tax planning.

Corporate tax planning is not just planning the company's financial position and statements, but it is a comprehensive, sequential and analytical tax operations for all financial aspects in accordance with tax efficiency and achieving accounting treatment of taxes, which consequently requires taking decisions aimed at reducing taxable liabilities.

Due to the complexity of the matter at the beginning for some individuals or companies. They resort to dealing with the offices of chartered accountants, auditors and tax services. Our office is one of the best, so we will dedicate this article to discussing tax planning and what tax services we can provide to you, but first let's get to know what tax planning is with the following definition.

The concept of tax planning : -

Procedures followed by the taxable person, whether an individual or a company, with the aim of reducing the value of the tax due from him during a certain period, by following one of the tax planning and financial planning strategies that analyze the financial situation accurately and analyze the tax situation.

Tax planning is completely different from tax evasion, as planning uses legal methods to not pay or reduce the value of tax, while tax evasion is the use of illegal methods to evade paying it completely, which makes the company subject to legal and criminal penalties and fines.

While tax avoidance is a person's search for legal ways and methods to reduce the price of the tax on him without making any tax planning, and thus tax avoidance differs from tax planning, tax avoidance is resorted to after the tax report and issuance, while planning can start from the first moment of the establishment of your company or before submitting the tax return.

The role of tax planning in reducing the tax burden on your company to the maximum degree in safe legal ways: -

A simplified video illustrates the role of effective tax planning in reducing the tax burden on companies by exploiting legal loopholes without falling under the law.

The importance of tax planning : -

· Improve the value of tax payments and reduce the value of tax losses.

· One of the most important objectives achieved by tax planning is to avoid falling under tax liability and the provisions of tax laws.

· It contributes significantly to the optimal use of the company's resources and assets that are not subject to tax.

· Provide sufficient liquidity to implement the company's investment plans.

· One of the most important reasons for the healthy growth of the company and its economic stability.

· Participates in making rational decisions that are in the interest of the company.

· Providing tax plans and recommendations for their accurate implementation, which helps the success of the company.

Types of tax planning : -

The types of tax planning vary according to the way they are planned:

Consensual tax planning :

The tax plan is drawn up in accordance with the tax provisions recognized and applied within the country.

Planning by time :

It is divided into long-term tax planning and short-term planning.

Planning according to the goal :

In it, the tax plan is drawn according to a specific goal, for example, sometimes a tax plan is developed aimed at replacing the fixed assets with other assets subject to tax amnesty.

Internal Planning and External Planning :

Internal planning aims to determine the company's accounting policies, the method of tax liberalization, the current means of tax payment, its benefits, tax reduction methods, and others, while external planning is done by determining the tax subject, activity, legal form and judicial registration of the company.

Characteristics of tax planning :

Integrated tax planning is based on several characteristics, including:

· Tax planning is a continuous and integrated process that includes all items recorded in the tax return.

· Planning to avoid paying the value of tax If this is legally available, there are many items that are deducted when determining the value of the tax by the Authority, and here the tax financier can when submitting the tax return replace the items known to be liable with deductible items, for example, replacing personal finance with financing through bank loans.

· Exploit all tax exemptions available in the tax law and related laws to reduce the financial value paid to the Authority.

· The tax entitlement will certainly decrease if the company since the beginning of its establishment has recognized all the costs and expenses committed to it, which is why we recommend that developing companies pay attention to tax planning from the beginning, which is provided by the best tax planning office in the Middle East "Egyptian Certified Public Accountants".

· Proof of all precautions, deductions and deductions made during the tax period.

· The appropriateness of the legal form of the company is one of the most important characteristics that must be paid attention to when planning.

· Reducing the value of the tax base is the first goal of tax planning and is based on the use of renewable accounting and legal methods that are compatible with the tax law and its developments.

Tax Planning Strategies :

To achieve good tax planning depends heavily on qualified consultants who are able to do financial and tax analysis and are constantly familiar with tax laws that are amended every year, and the success of the tax advisor also depends heavily on the tax strategy he follows and the extent and suitability of the company or individual.

What are corporate tax planning strategies?

Additional Expenses :

The company's taxable income is reduced by additional operating expenses, such as the purchase of new equipment, but it should be noted that the equipment is really needed within the company and will generate income from its use.

Deferral of tax payment :

Companies want to defer tax payment for a later financial period so that they can use that money to invest during the period and without interest from the tax authority.

Comparison between :

– Purchase or lease of assets, where the amount paid for the purchase of new equipment and when renting it is determined and determine which is better and reduces the calculation of tax.

– Is the term sale policy followed or cash sale?

Recording the full salaries of employees and the remuneration and allowances of the members of the Board of Directors

Recording the losses suffered by the company during the previous years : -

They will affect future years as they are approved losses.

Inventory Management :

Using appropriate inventory management methods is part of tax savings.

Dependency :

Of course, the number of members you support from your family members affects the value of the tax negatively, the more family members, the lower the value of the tax and vice versa

What are the tax planning strategies for individuals ?

Deduction in salaries and recruitment costs :

Recording the deductions, you are exposed to or the costs you incur for hiring helps reduce the tax.

Utilization of employment benefits :

Some individual companies offer their employees additional benefits for work such as medical and recreational benefits, and therefore part of the salary is deducted, and here you can exploit this deduction in your favor, as the tax authority takes into account all deductions, deductions and additional benefits.

Instability of income or timing :

Individuals who do not work in government agencies whose individual income is linked to the time of purchasing the service or product they have, and therefore the time of income changes and is not fixed, which makes the tax unfixed and changes according to the value of income, as well as some professions associated with a certain timing such as tourism professions.

Retirement Planning:

Entrepreneurs or individual companies always have a special account for them to live from after their retirement, and an amount of income is calculated for this account and this amount is considered one of the items affecting the tax.

Tax shelters :

One of the most important uncommon tax strategies is tax shelters, which help to reduce the tax or if possible cancel the tax on the company, with the rise in the value of taxes and the search of companies for a quick and large profit at the same time, companies turned to alternative solutions, including tax shelters, which are also known as tax paradises, which are meant by foreign countries other than your country that impose a very low tax and sometimes are not imposed at all.

These countries include companies from other countries to their tax scope, so they do not require them to be present within the country, but they require the opening of bank accounts and the presence of investment means, in order to increase capital and develop their economy, and although this method benefits the countries of tax shelters, it causes great damage to the global economy and the economy of the countries of origin of the companies.

The percentage of wealth that follows tax shelters and is not taxed during the past year reached more than $ 30 trillion, and among the most famous countries recognized as tax shelters are Hong Kong, Panama, Monaco, the Bahamas, Bels, the Cook Islands, Jersey, Cayman and others.

Characteristics of tax shelters :

The OECD has decided that tax shelters are any country to which the following characteristics apply: Not to be taxed completely or to be levied at a very low price. The state's refusal to send tax returns for companies and a device for exchanging tax information with other countries. The state's failure to disclose any banking or commercial information related to companies and the lack of transparency about the administrative and legislative procedures and laws of the tax shelter. The state allows companies to have a physical presence outside the borders of the state and does not oblige the company to have the company's headquarters within its borders.

Types of tax shelters :

When following the tax shelter strategy as one of the tax planning strategies, it must be taken into account to choose a suitable country from one of the three groups of tax shelters: The first group: includes countries that do not impose any tax so they are called "Zero Havens", and the number of countries in this group is very small compared to other types, and the company remains subject to its state tax. The second group: includes countries that impose tax but at a low value, and is divided into three levels of countries: Countries with a tax not exceeding 10%: such as Montenegro. Countries that impose reduced alternative taxes: such as the Bahamas. Countries that grant tax exemptions: such as the Virgin Islands. The third group: countries that grant advantages to some companies that practice a specific activity, including the State of Panama.

International Tax Planning Strategies :-

Types of international tax planning strategies .

· Transfer of the company's profits :

These are meant tax shelters mentioned above to transfer the company's profits from high-tax countries to low-tax countries.

· Conversion Price :

This strategy concerns companies with branches in different countries of the world, in which the transfer price of financial values of transactions, costs, financing, services, etc. is calculated, and the tax is reduced based on the monetary value of the transfer price.

· Financing through bank loans :

This strategy is based on obtaining a loan from a country that imposes high taxes and thus reducing taxable profit.

· Legislative Tools :

One of the most important strategies of international tax planning, where companies take advantage of the contradiction of legislation within countries, such as that some countries consider bonds as items of indebtedness and some countries consider them items of contribution.

· Forms of companies :

Some forms of companies with foreign branches, such as holding companies, are not subject to tax, and the company is chosen to be established within the borders of one of the countries that consider the distribution of profits from tax-exempt items.

Characteristics of tax planning for multinational companies :

These companies are established with the aim of benefiting from the benefits of tax legislation in different countries, where the company transfers its profits within countries with zero or low taxes, which reduces the value of its profits in front of the parent state of the company with high tax.

Tax planning for multinational companies is complex and difficult, due to the diversity of tax returns, legal formulas and tax laws for more than one country, which requires dealing with an international accounting firm capable of dealing with all international laws such as the Egyptian Certified Public Accountants Office.

Multinational corporations have branches within one or more tax haven countries.

Access to all the benefits offered by double taxation laws, which require the company to pay the tax value only once, either to the home country or to a state of tax havens.

These companies make many transactions between the company's headquarters and branches or between branches and each other in order to reduce the value of the tax imposed on them, including borrowing and development expenses.

International tax planning, which aims to reduce the tax according to all countries in which the company has branches, which is difficult at the beginning and requires knowledge and experience.

Local Tax Planning :

Tax planning depends heavily on the skill and familiarity of the planner with all international and local tax strategies and laws, for example, the Egyptian tax law relies heavily on Law No. 91 of 2005, and of course all this law has its consequences and effects on other laws.

We mean here that the awareness of the tax scheme of all these laws will help him to obtain a clear and comprehensive vision that enables him to make correct and successful decisions that are compatible with tax laws and provisions, without causing him any problems or judicial violations or using tax evasion as a means.

As an example: when drawing tax planning for a private company and preparing a form 2 insurances, for example, we find that the Insurance Authority decides that the minimum insurance is 1400 EGP per month, but if the employee's salary is 2400 and you deduct this amount, what the employee gets is 1000 EGP, and although you will not fall under the insurance law, you fall into violation of the decision of the Council of Ministers, which decided that the minimum salary in private companies is 2400, and so it is necessary Recognize all the ramifications and ramifications of tax laws.

Local and international tax planning needs great experience and knowledge of all the latest tax regulations and laws, so I advise you to deal with a large and well-known accounting office in this field and enjoys a good reputation among clients, which is strongly available in the "Egyptian Certified Public Accountants" office.

Tax Advisory :

Tax planning needs a lot of experience, skill and knowledge to be implemented and achieve its desired goals, so individuals or companies resort to an accounting office or financial advisor to help him organize the affairs of his company and reduce the tax calculated on it, and with the presence of many good accounting consultants... The name of the office "Egyptian Certified Public Accountants" emerged.

The office provides all financial, tax, accounting and legal advice, we have an expert and integrated team that includes chartered accountants, auditors and huge tax services, fully and continuously aware of the latest legal developments and tax amendments.

Experts in tax planning and ready to receive and answer your questions at any time, many years of experience The office also provides online tax advice, and we also offer the first consultation for free, so book your seat with us now.

What will ECA offer you ?

- We provide all tax improvement and planning services for individual and private companies and help the customer to rationalize the value of the tax in accordance with the provisions and developments of the tax law and its related.

- Integrated analysis of the company's financial position and in accordance with tax efficiency standards.

- Fully aware of the latest technological and electronic tax methods and the latest developments in tax law.

- We can help you avoid tax with the highest quality and using the best legal methods.

- We ensure that you minimize tax costs and in legal and legitimate ways.

- Drawing a long-term tax plan for your company from the beginning of its birth that can avoid you paying a lot of taxes in the future.

- Technical assistance and internal expertise in the company to ensure the implementation of the tax plan.

- Significant expertise capable of optimizing the available tax savings.

- Our team provides accurate tax recommendations and accurate and proven accounting strategies for successful application.

- Our team is available 24 hours a day to provide technical support and tax advice.

The "Egyptian Certified Public Accountants" office is one of the best chartered accounting offices in Egypt and the Middle East, its permanent goal is the success of the client and reducing its costs to the maximum possible, and we always strive to provide the best accounting, legal and tax services, the most important of which is tax planning, so do not hesitate to contact us.

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Do not hesitate to contact us and we promise that you will soon share your success story with our office