TAX optimization

When it comes to taxes, the interests of the state and business immediately diverge in opposite directions – the state wants to get as much money from business as possible, while the enterprise, on the contrary, wants to reduce government payments.

The owners of the companies, as expected, want constant growth in income and profits. Along with this, they are obliged to pay taxes that cut this very profit. All this is typical for every state. But at the same time, several other serious factors play a role in Ukraine.

First of all, this is complex tax legislation and the often encountered arbitrariness of inspectors of the State Fiscal Service. Such things are due to the fact that most entrepreneurs do not understand the norms of the tax code and tax rates, which leads to mistakes that lead to disastrous consequences for the enterprise.

All over the world, taxes are minimized through tax optimization schemes. Tax optimization is a set of legal measures aimed at minimizing the tax burden on an enterprise.

Tax optimization (also known as tax planning) also exists, which gives entrepreneurs the opportunity to legally reduce tax payments in Ukraine.

Why are tax optimization schemes becoming more and more popular among businesses every year?

In 2021, the answer to this question is simpler and more obvious – tax rates are growing, the economic situation in many industries has deteriorated due to the impact of the pandemic, lockdowns and other quarantine measures.

In this case, the taxpayer has no choice but to take up tax planning and tax optimization in order to save his business.

Are there legal ways to reduce business tax costs?

Yes, there are legal tax optimization schemes and they are all based on a legal strategy. The main thing is to first decide which legal mechanisms to use in each specific case.

• Adjustment of the activities of the enterprise.
• Implementation of legal methods and means of doing business and accounting.
• Debt (receivable) restructuring.
• Optimization of expenses and income, in terms of when these income or expenses are counted.
• Development of a mediation scheme.
• Optimization of costs for wages and social security contributions.
• Optimization of expenses in the holding due to competent structuring of companies.

Together or separately, this will definitely minimize the tax burden on business, and in an absolutely legal way. Agree that this turns tax optimization into a key moment in business management and settlements with government agencies.

It is important to take into account that tax authorities are not interested in introducing tax planning at enterprises, because this will entail a reduction in payments. As a result, after the company has optimized its tax payments, inspections of the enterprise by the State Fiscal Service may follow in order to identify violations, charge fines and charge additional taxes.

You do not need to be afraid of these checks, since tax planning is a completely legal set of measures. Consequently, no violations of the law will be revealed during the inspections, and if such are presented, they can be easily appealed in the administrative and judicial order.

Optimizing VAT is a good opportunity to save money.

According to the Law, everyone who uses the general taxation system is obliged to pay VAT; not a single purchase and sale transaction can do without it. Therefore, today VAT ranks second among all types of taxes. Please note that it is impossible to avoid paying it, but reducing the amount of payments by optimizing VAT is a very real task.

Tax planning in the organization.

If a public organization does not have the status of a non-profit organization, then it must pay income tax. In this case, the optimization of taxation of a public organization will help in reducing tax payments.

Restructuring of receivables.

In order to optimize taxes, sometimes they turn to receivables restructuring. If the company has a receivable, it still needs to pay taxes.

But there is an alternative, but legal option. You can legally sell this receivable, thus generating a loss, or reduce profits. This will significantly save on income tax.

Tax planning concept from Kapustin & Partners law firm.

Tax optimization is an individual process for each company. Template methods do not work here and usually only bring harm (in the form of fines and additional taxes).

Therefore, the lawyers who will deal with this for your firm should:

• perfectly know the tax code and loopholes in it;
• track changes in tax legislation, keep abreast of innovations;
• be competent specialists in business law;
• have practical experience in relations with the tax authorities;
• know effective legal schemes to reduce tax deductions such as restructuring of receivables.

All this is typical for the attorneys of the Kapustin & Partners Law Firm. With our help, you will be able to truly effectively manage your business, investing additional funds in development, and not in taxes.

Start your tax optimization with us!