The end of the year is coming, and the accounting offices and departments are buzzing. But what can you do to optimise your year-end tax report?
Marc Verbeek, Tax Partner at BDO, gave us a practical guideline on how to reduce corporate taxes for your year-end report. Here are a few highlights of the presentation.
Amortisation-wise, there are a few different ways of making a difference: simple ways like the type of amortisation that you choose (straight line or double declining balance method) as well as more complex systems such as the Deferring Taxation of Capital Gains.
Another important matter to bear in mind is provisions, they might be made for anticipated bad debts or for estimated risks and costs that may arise in the following year. The crucial issue is to be aware of what might happen in the future and take action now.
Generally, the idea is to ‘play around’ with the non-fixed variable of the equation, the one that could be modified in one way or another before the year-end and that would positively influence your tax report.
In the case of lower corporate tax rates, lower tax rates are applicable if certain conditions are fulfilled: majority of shareholders are individuals; dividends ≤ 13% of paid in capital; director’s salary ≥ company’s taxable income.
The two first ones are quite hard to modify, but the third one (director’s salary) is the one that could be slightly altered and qualify you for a lower tax rate.
Of course the question of benefits in kind has been discussed, especially the corporate car aspect, and the answer is: buy a cheap car with a low CO2 emission or be prepared to pay the price.
On a sensible note, for most procedures, the appropriate form needs to be filled in and the necessary proof kept close to hand. It is also always advisable to fill in the required paperwork properly and on time, especially when it comes to fee slips (309% secret commission tax).
Marc wrapped up his presentation with an overview of the new corporate tax new rules for 2013:
1) 0.4% capital gains on shares for large companies (which were until now tax free)
Conditions to be a large company:
a. 50 staff
b. 3.6 turnover
c. 7.3 balance sheet total
If 2 out of the 3 conditions are fulfilled, the 0.4% will apply
2) Reduction of the rate of national interest
a. 2.74% for large companies (instead of 3% in 2012)
b. 3.24% SMEs (instead of 3.5% in 2012)
3) Withholding tax: 25% basic rate
4) More flexibility for the 309% tax application
Overall, it was an instructive session where participants had the opportunity to ask their questions freely. I am sure that more than one picked up a few tips that will come in handy when filling their tax report.
Topic of the discussion: Tax optimisation at year end
Speaker: Marc Verbeek, Tax Partner – BDO
Thursday, 22 November 2012