Taxes

Taxes

The term 'taxes' is readily associated with administrative obligations attached to running any business, and as such these obligations are considered a necessary evil. Hence the burden of correspondence with the tax authorities and a series of complicated forms. However, filling in tax returns is merely the final stage of a larger process. The amount of corporate income tax due is determined by the choice of legal form, the way in which the business is financed and how the company shows its assets and liabilities on the balance sheet. Moreover, in the case of larger businesses it is important which functions are performed by different units in the business and how the business has organised its operating capital and important assets such as patents and trademark rights.

As the payment of taxes easily constitutes a dominant cost item within most businesses, it is well worthwhile focusing attention on controlling the tax process. This process becomes more complex as businesses grow and more companies and/or countries become involved.