Effective Approaches to Reducing Business Taxes
Below are five strategies for reducing your company’s taxes. Check out on S Lewis CPA, how each one works and organize the implementation of these actions in your business.
- Do a good tax planning
Most of the taxes you pay in your company are related to the type of tax regime you practice, the one with which you were registered.
Many entrepreneurs do not know that changing from one type of taxation to another is possible, which can generate a lot of savings.
However, to determine if this change is worth making, the tip is to start with tax planning , which analyzes your history of financial transactions and helps you use tax laws strategically to minimize your tax burden.
This must be done after a thorough survey of data and simulations on how the payment of taxes would be in each modality. This process often helps identify that switching from one tax regime to another is a good option.
However, planning is essential for you to be sure about this change. Otherwise, the effect can be the opposite: increasing the amount you pay to the government.
Tax Planning Also Includes:
- Analysis of opportunities for tax deductions and credits;
- Reorganization of the financial structure;
- Investment in assets that may generate deductible expenses.
- It is important to highlight that even those registered with Simples Nacional can benefit from this change. We’ll talk more about the types of regimes below.
- 2. Participate In Tax Benefit Programs
The government offers some programs that offer tax incentives to encourage the participation of entrepreneurs in various projects, which benefit the population in various areas such as culture, sport, leisure, education, and more.
Being part of these programs allows you to get an exemption or reduction of some taxes, which is great for your financial management.
Another benefit and way of how to reduce business taxes is linking your brand to a project with a positive social impact, such as culture incentive laws.
In these cases, you win on both sides:
- reducing the volume of taxes paid;
- increasing the company’s reputation.
Examples of programs that offer tax incentives to companies
- 3. Reduce Your Pro-Labore
Pro-labor is your salary as a company’s managing partner, but don’t worry because when we talk about reducing it, we don’t mean that you will earn less.
Rest Assured That Doing So Is Not Against The Law.
After all, in pro-labore, Income Tax and social security contributions are charged, and both are calculated with a percentage of the registered value. Therefore, by reducing pro-labore, you reduce the tax amount.
To compensate for this reduction and not leave you with a lower income than you need, it is possible to increase the profit sharing, which is not subject to taxation.
Once again, the indication is that you are looking for an accountant to help you make this change, ensuring that you will comply with the law while reducing expenses.
- Outsource some activities
Contracting CLT (signing an employee’s work card) also entails some taxes. Therefore, outsourcing areas not part of the company’s main activity can be a good alternative to reduce these costs.
For example, it is possible to outsource the marketing sector, hiring an agency or a specialized professional.
Some entrepreneurs still believe that outsourcing is a way to reduce a company’s profit. However, in many cases, its effect is just the opposite.