Formation Company & Tax Advisory

Wednesday, April 25, 2018

Tax planning

With "Tax Planning" we mean all the activities aimed at optimizing the tax burden, for example opting for a tax system rather than another, moving within the law, that is enjoying all the opportunities contained in the tax rules, clearly admitted by those who passed laws. "Tax Planning" developed in order to allow a reduction in the tax burden and to create a source of self-financing for the company that thus, by reinvesting more profits into the "Core Business" may strengthen its position on the market to competitors' disadvantage.

Before considering the matter of tax planning so of the optimization it is important to deal with the idea of "company internationalization".

The company internationalization process may develop on three different levels:

1) PRODUCTIVE: when, for example, the company decides to open a factory in a foreign country.
2) COMMERCIAL: when the company decides to open to foreign markets by selling its products and services.
3) FINANCIAL: when the company decides to internationalize the financial management of its own assets without considering productive and/or commercial internationalization.

In every case, whenever the company decides to invest in a Country different from its country, it must take into consideration some main factors:

  • The tax system of the Country where the investment takes place.
  • The International tax system (OCSE – conventions to avoid a double imposition).
  • The common tax system (whenever it s necessary).
  • The tax system of the Country where one resides.
  • The tax system of e-commerce ( whenever the condition occurs).

The "Tax Planning" role is to allow the lawful movement within the different system so that to let the company to plan at best its own business through the optimization of tax burden. Therefore, operating a tax planning means applying in a correct way all the rules at your own disposal from the tax systems of different Countries and the tax system both at common and International level.

Bright Business Consulting LLP offers its customers advice aimed at checking the intervention modes by suggesting "Warranty & Assistance".

After what said above, you may wonder:

1. Why should a company engage a "Tax Planning"?

2. Why should a company consider a Country when thinking about its own tax optimization?

As a first answer it is clear how the fiscal wedge of a Country may turn out to be a burden on company management, with a specific negative impact on competitiveness. There are European Countries/World where the high tax pressure grants services and efficiency, but there are also Countries where, even though you pay a lot, you do not get feedback benefits: so a company may lose competitiveness and ability in the resource management.

The data generally disseminated through various means of media, as well as how much you can learn from the section "Opportunities", section of this same website, in the international economic and financial landscape, for various reasons, there are different ways of how each Country manages the relationship tax with companies operating on its territory.

Along with any other company expense, therefore, the tax burden too needs to be optimized. Of course, you don't have to optimize just isolated and infrequent operations, but rather you'd better to achieve a real planning in an organized and well-planned way, that in observance of law may allow a complete fulfilment of those purposes aimed at getting a good and efficient level in its own activities.

Applying to the most favourable international opportunities represents in such a way not only a mere way to save up on tax matters, but it is the fulfilment of a true competitive strategy.

Considering that, we can define "Tax Planning" as an internationalization process of the company aimed at building up a series of activities with the purpose of achieving a specific aim:

Optimization of the total amount of the fiscal burden of a company, in full observance of civil and tax laws both domestic and international. Not only. With a careful tax planning and with the purpose of internationalizing the company, tax planning aims at avoiding phenomena of international double imposition in the income flows between the "Country" of origin and the Country of destination of the same income. With reference to "World Wide Taxation", China undersigned most of the international multilateral agreements in force that represent special rules destined to operate departing from domestic fiscal rules.

A correct "Tax Planning" does not mean using the so called tax heavens (that is those Countries with privileged tax systems), or carry out activities direct to get illicit or undue tax saving (tax evasion or avoidance).

International tax planning is therefore not a purpose but rather is a means to plan and optimize the company investment.

Following the example of big holdings, one should optimize the fiscal burden by matching it with the needs of company development (new investments, debt/financing planning and so on).

Bright Business Consulting LLP in strict observance of the existing rules, plans together with the entrepreneur the financing and tax policy that better suits the needs of the company management. Thanks to a deep knowledge of the different tax systems Bright Business Consulting LLP is able to best adjust the fiscal burden to the company aims, thus exploiting in a licit way the opportunities present in their Country of origin, in United Kingdom or somewhere; in order to improve the profitability and so the company competitiveness.

Bright Business Consulting LLP is also ready to support the entrepreneur under different aspects connected to "Tax Planning", such as for example, the quality and quantity analysis of financing company elements, the assistance for renegotiating the access conditions to credit and the continuous assistance to keep always under control the changing company financing performances, and also with three further specific activities:

  • Cash Tax Planning.
  • Country Tax Advisory.
  • Business Tax Accounting.

These ones develop the analysis leading to tax opportunities, that are peculiarly linked to data processing.

CASH TAX PLANNING

Cash Tax Planning includes accountancy and stock inventory respecting the tax rules and laws concerning income and expense recording.

The main areas include: fixed capital, recognition of profits and stock inventory.

  • INCENTIVES TO RESEARCH: we may identify the tax incentives associated to the research activities carried out by the company, concessions included and also detractions for the expenses related to research.
  • FLOW-THROUGH: when required, we can offer tax advice regarding partnership, Joint Venture and other flow-through entities. The British system offers two possible alternatives to the foreign investor that carries out his own activity in each Country: the creation in loco of his own company or the new establishment. In order to find the most suitable organization tool to the specific needs, it is necessary proceed with a complete fiscal analysis of the company organizations models that can be used.
  • CAPITAL ASSETS AND INCENTIVES: through our technological skills, we help to optimize the fixed capital analysis and identify the tax detractions.

This kind of activity is addressed to help customers to improve the fiscal flow of cash, to create possible reimbursement opportunities and to provide taxes on cash and tax rates that turn to be efficient in the coming years.

COUNTRY TAX ADVISORY

Country Tax Advisory is conceived to satisfy your requests advice requirements and compliance to tax rules. Through the skills and the specializing fields it is granted a full service aimed at supporting the customer in planning, in accounting and in compliance for tax rules.

  • COMPANY FINANCE: research of special financing and not (debt capital), techniques of treasure management, techniques of risk of change management, techniques of international personnel management and techniques of management of the different methods of payment (bank transfers, documentary credits, etc.).
  • STRUCTURED FINANCE: tax counselling linked to company operations of extraordinary finance (mergers, split, appointments, changes, etc.). Counselling for debt title issuing, both typical and atypical, project financing, leverage and management buy-out, securitization operations.

BUSINESS TAX ACCOUNTING

Business Tax Accounting is conceived and is essential in the world of business and fundamental tax context. The assistance in these three following segments are strategic both to the "Business Plan" and to the "Tax Planning":

TAX ACCOUNTING: support in the calculation of taxes, implementation of accounting policies under IFRS and/or local GAAP.

In the International field there are Countries more competitive than others from a tax point of view, offering several advantages for both legal entities and individuals, identifiable for example:

  • Taxes on income of legale entities are among the lowest in Europe.
  • Strong incentives and/or facilitations for investment in research and development.
  • An effective system of monitoring and enforcement of the provisions on double taxation.
  • Competitive individual Tax.

There are two type of tax in the system: 

  • Direct Taxes.
  • Indirect Taxes

To grant the competitiveness and the survival of a company on the market, it is therefore necessary a continuous process of tax planning in order to include in a correct way the tax burdens, both in the "Business Plan" aimed to the new business that in the anticipatory profits to the management of the company, may it be small or big.

For the legal entities here listed some services where Bright Business Consulting LLP can intervene in support under the "Business Tax Accounting":

  • Consultancy in the field of VAT (IVA) and other indirect taxes.
  • Rating of the fiscal impact in the import/export operations.
  • Advice about treaties against double taxation in the relevant profiles from the company point of view.
  • Consultancy on tax systems compared.
  • Advice on local taxes.
  • Group and holding taxation.
  • Taxation of corporate transactions.
  • Transfer pricing.

For the entities here listed some services where Bright Business Consulting LLP can intervene in support under the "Business Tax Accounting":

  • Advice about treaties against double taxation in the relevant profiles for individuals.
  • Consultancy on tax systems compared.
  • Advice on local taxes.
  • Consultancy in the field of static and/or dynamic management of the assets.

TAX FUNCTION PERFORMANCE: improvement of operational strategies and the organizational structure, procedures and tax controls, efficiency of systems and data management.

TAX RISK: identification and definition of the main risks, assistance in the monitoring of the controls and their possible improvement.

The field and the nature of the services that Bright Business Consulting LLP offers, may vary according to the specific needs of the customer. What does not change is the high standard of the service that offers "Warranty & Assistance" in order to satisfy the needs of the customer along the whole Tax Life Cycle. Planning, calculation of tax fund, compliance and reporting, sustainable organization strategies and effective protocols of risk management, thus helping your company to express fully its potential.

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Bright Business Consulting LLP
58/60 - Kensington Church Street
LONDON - UK - W8 4DB 

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