Are Your Tax Affairs In Order?

As an individual, you have the responsibility to make sure that you are paying the appropriate tax. At the same time, there are many legal things you can do to ensure you are not overpaying on tax, and to help you save money and simplify the whole process too. From time to time, it really is worth checking that your tax affairs are in order, so that you can be sure you have everything in place. Here are some of the things you may want to think about to that end.

Check Your Tax Band

This is one of the first things you will always want to do when you are trying to make sure your tax affairs are as they should be. Your tax band determines the level of tax you are expected to pay, and if it is not right then you will be under- or over-paying on your tax. This can happen for all sorts of reasons, and sometimes it is the case that a person is in the wrong tax band for years before it is rectified. It’s unlikely to be your fault, so just check it and make sure that you have sorted it out.

Check Benefits

There are usually many benefits that you may be entitled to, and it’s a really good idea to make sure you have all the ones that you are able to access. In fact, there are usually more of these than you might think. What’s more, however, is that they also affect your tax and how it works out, with some benefits reducing how much tax you have to pay. So it’s a really good idea to check this, getting the necessary help with it if you want to make sure you do it right.

Hire An Accountant

Even for those with minimal outgoings, it can be enormously helpful to have the assistance of a tax accountant from time to time. Even just having a meeting once a year could be enough to help you to figure out where you are and what you might need to work on regarding your tax. Look for a tax accountant you can trust, such as a proper CPA Firm (Certified Public Accountants), and you will find that it helps you to have a much better approach to your taxes overall.

Don’t Be Tempted To Cheat

Ultimately, those who cheat the system never end up better off – you will be caught eventually, and you’ll pay for it in the end. If you find yourself being tempted to cheat, you should check yourself and try not to go for it. There are all sorts of reasons people end up doing this, but it’s simply not worthwhile, and you’ll find that you are much more likely to end up worse off. It’s really important that you stay legal and above board – something else that a good accountant can help you with.

 

How Tax Experts Can Ensure Your Business Is Compliant

Tax experts are professionals with advanced training and knowledge of tax law. Running a business can be difficult, but it’s essential to make sure you’re doing everything by the book when it comes to taxes. That’s where tax experts come in.

They can help ensure your business is compliant with all applicable regulations and that you’re taking advantage of all the tax breaks available to you when sales tax filing.

If you’re looking for peace of mind regarding your taxes, hiring a tax expert is the way to go.

Keep Your Business Compliant

Tax laws are constantly changing, and it can be difficult for businesses to keep up with the latest regulations. Tax experts can help your business stay compliant by keeping abreast of the latest changes and filing your tax return correctly. They can also help you claim any tax deductions or credits you may be entitled to. In addition, tax experts can help you plan for future changes in the tax code to minimise your tax liability.

Working with a tax expert can ensure that your business pays the right amount of taxes and takes advantage of all the available deductions.

File your Taxes Correctly And On Time

Filing taxes can be a complex and time-consuming process, particularly if you have a difficult financial situation. Tax experts can help you navigate the tax code and ensure that you take advantage of all the deductions and credits you’re entitled to. They can also help you file your taxes on time, avoiding costly penalties. In addition, tax experts can help you plan for the future, ensuring that you’re taking steps to minimise your tax liability.

Whether you need help with your taxes or your sales tax filing, tax experts can provide the guidance and assistance you need to stay compliant with the IRS.

Save Your Business Money

Tax experts can help you find tax breaks and deductions that could save your business money. They know the ins and outs of the tax code and can help you take advantage of every deduction to which you’re entitled. You can be confident that you’re getting the maximum possible tax savings by hiring a tax expert. And, because they’re up-to-date on the latest changes to the tax code, they can help you plan for the future and make sure your business is prepared for whatever comes its way.

Whether you need help with your taxes or your business taxes, a tax expert can provide the guidance and support you need to get the job done right.

Keep Your Business Compliant

Running a business can be a complex undertaking, and there are a lot of laws and regulations that you need to comply with. This is where tax experts can help. They can advise you on the best way to structure your business to minimise your tax liability, and they can help you ensure that you are complying with all the applicable laws. Tax experts can also help you with more complex estate planning and international tax law issues. In short, they can provide valuable guidance and peace of mind, knowing that your business is on solid footing.

By hiring a tax expert, you can rest assured knowing that your business is in good hands and is complying with all applicable laws.

Final Thoughts

Hiring a tax expert is an important decision for any business owner. Tax experts can provide valuable guidance and assistance, helping you stay compliant with the ever-changing tax laws. They can also help you file your taxes correctly and on time and take advantage of all the deductions and credits you’re entitled to.

Working with a tax expert can save your business money and ensure that your taxes are filed correctly. If you’re looking for peace of mind regarding your taxes, hiring a tax expert is the way to go.

Countries Agreement to Avoid Double Taxation

Double taxation refers to income tax being paid twice on the same source of income. Double taxation occurs when income is taxed at both the corporate level and personal level, as in the case of stock dividends. Double taxation also refers to the same income being taxed by two different countries.

The text of the Agreement, which had already been approved in Switzerland in 2019 by the Council of States and the National Council, was approved in Brazil both in the House of Representatives, on March 5, 2020, and in the Federal Senate, on February 24, 2021, and now depends only on publication by means of a Presidential Decree to start producing legal effects in Brazil.

Eliminating uncertainties and distortions and encouraging the flow of investment between the two countries, among which we highlight:

  • a) Inclusion of the following Brazilian taxes IRPJ; IRPF, and CSLL – which is expressly provided for in the Agreement – and the recognition on the Swiss side of the inclusion of cantonal taxes in its scope;
  • b) Besides aiming to avoid double taxation and possible double non-taxation, and containing a general anti-abuse clause, the Agreement includes both transparent entities and collective investment vehicles;
  • c) Although until now dividends have not been taxed at source in Brazil, the Agreement includes a provision that reduces to 10% the withholding tax on dividends paid to the beneficial owner of a company that holds at least 10% of its capital;
  • d) With regard to interest, it determines the reduction of the IRRF rate to 10% on interest on loans granted for a minimum term of 5 years, granted by banks for the purchase of equipment and/or investment projects;
  • e) Royalties are also now subject to the reduced rate of 10%, except for those arising from the use, or right of use, of industrial and commercial trademarks; and
  • f) Technical services were given a specific definition, which no longer includes services of an administrative or scientific nature. The IRRF rate here has also been limited to 10% – lower than the general Brazilian rule, which provides for a rate of 15%.

The tax team of Stüssi-Neves Advogados are following closely the publication by Presidential Decree and are available to answer any questions regarding the Agreement.

Stüssi-Neves Advogados was founded in 1977. The law firm consists of some 30 lawyers, distributed between our offices in São Paulo and Rio de Janeiro on a basis of around 50-50.

Our clients are mainly companies of European and Japanese origin, who operate or intend to operate in Brazil directly or through subsidiaries or partnerships.

Cost Sharing with Company Domiciled Abroad

Cost sharing is a process wherein two or more organisations work together to secure savings in one or more areas of business operations.

1. Characterisation of shared services as reimbursement

The payment of costs and expenses shared between companies of the same economic group, with headquarters in different countries, may be treated as a mere reimbursement without the incidence of a high tax burden on payment or receipt. However, in order for such costs and expenses to be characterised in Brazil as a reimbursement, certain requirements must be complied with.

First of all, to be treated as a reimbursement the costs and expenses must relate to supporting activities rather than core activities of the service provider. Thus, services that are included in the corporate purpose of the service provider may not be shared, and consequently the costs and expenses thereof cannot be treated as a reimbursement.

For this reason, it is only possible to recognise as a reimbursement of shared costs and expenses those actually incurred by the service provider. It is therefore not permitted to add any amount or profit margin to the costs or expenses shared and reimbursed.

Moreover, in order for the costs and expenses to be recognised as a reimbursement, it must be shown unequivocally that the services shared are of mutual benefit to the companies that participate in the agreement. Accordingly, all the companies must benefit from the services shared, including those performing the services.

With a view to proving compliance with the minimum conditions required, it is necessary to have, apart from other documents, a formal contract between the companies of the group, showing the total costs of each service incurred and shared, and also the reasonable and objective criteria used for the division.

The minimum  of said contract were set out in Cosit Answer to Consultation no. 8/12 of which it is worth citing the following:

  • a) the division of the costs and risks inherent to the development, production or obtaining of goods, services or rights must be detailed;
  • b) the contribution of each company must be consistent with the individual benefits expected or actually received;
  • c) the identification of the specific benefit to each company of the group must be clear;
  • d) there must be an agreement for reimbursement, meaning the refund of costs relating to the effort or sacrifice incurred in the carrying out of an activity, without any additional profit;
  • e) the collective nature of the advantage offered to all the companies of the group must be express;
  • f) there must be a provision for remuneration of the activities, irrespective of their actual use, it being sufficient to “put the activities at the disposal” of the other companies of the group;
  • g) the conditions must be such that any company, in the same circumstances, would be interested in contracting.

In short, the contract must state the total cost or expense that benefits the signatory companies; the criteria for its division, each company necessarily defraying only the benefits actually expected or gained, with the possibility of their identification; and further it must state the manner in which reimbursement of the cost or expense will be made, with the supposition that it will be attractive even for independent companies.

Although the amounts classified as reimbursement of costs and expenses do not reflect any financial gain, which is sufficient to justify the non-incidence of taxation, the Brazilian Federal Revenue has still not adopted a firm position to this effect.

2.1. Payments abroad

Generally speaking, payments, credits or remittances abroad relating to the provision of services are subject to Withholding Income Tax of 15%, the Contribution on Economic Activities of 10%, the Contribution for the Financing of Social Security payable by the Importer of Foreign Goods or Services from Abroad of 7.6% and the Contribution for the Social Integration Programme and Civil Servants’ Investment Programme due on the Importation of Foreign Products or Services of 1.65%. The Tax on Financial Operations of 0.38% is due in any case. The Tax on Services, with the maximum rate of 5%, may also be demanded by the municipality.

The IRRF paid in Brazil may be taken as a credit abroad if there exists a double taxation convention with the country in question, or, at least, reciprocity of treatment.

It is worth mentioning that, in the event of a remittance of funds abroad in payment of services, the financial institutions involved are also responsible for the operation, for which reason they tend to confirm the need to pay the taxes due on the operation in order to avoid any risks.

2.2. Cash receipts from abroad

Payments received by the Brazilian company for services shared may be regarded as corresponding to services exported. In this case, the funds received from companies abroad, in the form of foreign currency, would not be subject to PIS and COFINS on the amount invoiced. In any case, if they are recognised as remuneration for services rendered, they would be subject to IRPJ and CSLL. The ISS on the services may also be demanded by the municipality in question.

3. Possible risks and means for their reduction/elimination

As already stated, the Brazilian Federal Revenue has not confirmed its attitude regarding the non-taxation of payments relating to costs and expenses shared and reimbursed. As a result, in operations involving remittances abroad, the financial institutions normally require to see proof of payment of taxes.

If it is intended to avoid paying tax, and with a view to reducing, and even eliminating, possible risks, it is important that the operations be properly formalised. It must be possible to show, by producing solid evidence, that the funds received from, or paid to, the related party refer to the recovery of expenses incurred for the benefit of another, so as not to generate income/earnings for the recipient.

The contracts signed must contain details sufficient to prove compliance with the requirements necessary for characterisation of the reimbursement, with the resulting non-taxation, and all the supporting documentation must be retained.

An alternative, in order to guarantee the position of the Brazilian Federal Revenue, in principle and preferably in favour of the non-incidence of tax, is the submission of a formal consultation with a view to confirming the interpretation applicable to the case.

Specifically for operations involving remittances abroad of sums relating to the costs and expenses shared, it is possible that, even on production of the contract signed between the companies of the group, together with all supporting documentation, and further even presenting the formal consultation to the public authorities, the financial institution may not agree to make the remittance without payment of the tax.

In this event, a declaration may also be produced to the financial institution, in which the company making the remittance assumes the obligation to inform the institution immediately of the result of the formal consultation, as soon as a reply is received from the Federal Revenue, and also to comply with the result thereof, if necessary, with payment of tax on the operation.

We consider that, provided the above requirements are met, the risks may be reduced or even eliminated.

Thailand’s PUGNATORIUS Expresses Concerns Regarding TIWB

TIWB is an initiative to facilitate the transfer of tax audit knowledge and skills to developing country tax administrations using a practical, “learning by doing” approach.

Thailand’s recent participation in the “Tax Inspectors Without Borders” assistance program endangers not so much legally but factually the long-term cherished cross-border tax structures among the land of smiles. It demands sooner or later increased requirements for local tax advice and international tax planning.

TIWB allows the OECD, which is behind this raid against international tax competition, to familiarise the Thai tax authorities with OECD tax policy and viewpoints by sending their expert auditors to a tax-legally underdeveloped country, as Thailand is considered not entirely unjustified.

In the past, Thailand has been deliberately reluctant to interpret and reclassify cross-border transactions and to reinterpret double taxation agreements and tax information exchange agreements. This was done with good reason, only ostensibly inefficient, and Thailand participated in this tax-friendly treatment in several ways and at several levels.

The formal reason for Thailand’s Revenue Department to sign up for the training course for a world of “taxation without borders” is the desire to tax cross-border e-commerce and streaming services. However, this is not a limitation but only a starting point for the new right way of taxation with the friendly and targeted support by the OECD.

To address the tax challenges of the digital economy is just the first step on the 15-points-action BEPS list of the OECD. The base erosion and profit shifting initiative is e.g. also directed towards the topics of CFC controlled foreign companies, transfer pricing, abuse of tax treaties, and aggressive tax planning arrangements.

The tax counsellor PUGNATORIUS Ltd. analyses and monitors further developments and will provide practicable solutions for the more stringent requirements of future Thai tax planning. The announcements of the Thai Revenue Department are from June 2020. The Bangkok law firm sees a pressing need for action in this area for a variety of Thai tax issues.

Where’s My Tax Refund? We Explain Here

Want to know the status of your tax refund? Do you believe you deserve a tax refund? In this post, we’ll outline the primary causes of tax overpayments, as well as how to check the status of your tax return and request a refund for overpaid contributions.

Tax refunds are often seen as a financial windfall, offering individuals an opportunity to boost their savings, pay off debts, or indulge in a well-deserved treat. However, understanding how tax refunds work and strategically managing them is crucial to make the most of this financial boon. In this comprehensive guide, we will delve into the intricacies of tax refunds, offering valuable insights and practical advice to help you optimize your financial planning.

Where Can I Check The Status of My state Tax Refund?

Call 0300 200 3300 to find out the status of your refund as a starting point. HMRC is that. The phone lines are available Monday through Friday from 8 a.m. to 8 p.m. and on Saturday from 8 a.m. to 4 p.m.

Can You Monitor The Status of Your Refund Online?

On the gov.uk website, you can monitor the progress of your tax refund if you prefer to file electronically. There is a short survey you may fill out to see whether you have overpaid taxes. It may appear, among other places, on a self-assessment tax return, pension payments, pay from a current or former work, or redundancy pay-outs.

How Can I Find Out The Status of My Refund?

So if one falls through your letterbox, don’t start jumping from foot to foot. P800 letters may potentially be a sign that you haven’t made enough tax payments.

Once the applicable tax year has concluded in April, you’ll receive your P800. Typically, you’ll get it in September.

You can claim online at GOV.UK using the information in your P800. The income-tax refund will show up in your bank account in roughly five days if you can file your claim online.

If you’d rather not wait that long, your refund will arrive in the mail as a check in around 45 days. However, a more thorough explanation of time constraints is provided below.

What if you don’t have a P800 but think you should be receiving a refund of income taxes? No issue.

Where Can I Call to Find Out The Status of My Tax Refund?

Call HMRC before the end of the tax year, which is April 6, 2019, and explain why you believe you owe an income tax refund for the current year but haven’t received a P800.

You have four years from the end of the tax year in which the overpayment occurred to file a claim for your income-tax refund, which is good news.

What If You Owe Money to HMRC?

If you have more than one employment, have changed jobs, or are receiving taxable fringe benefits from your employer, such as health insurance, it may be the case that you owe HMRC money.

You’ll probably receive notification if you haven’t paid enough income tax between May and October after the relevant tax year.

In any case, HMRC has a year to notify you of the underpayment error. You can ask them to waive the additional tax demand if they refuse.

Yet, if they are still within the 12-month window, your only choice is to pay. Yet, you might be able to divide the amount among several tax years.

Below is A List of The Possible Grounds for Your Potential Tax Refund:

  • You married someone who was born before April 1935, either you or your spouse.
  • Your tax laws are incorrect.
  • You now work for yourself, and your situation has altered. For instance, profits have decreased. This may indicate that your account payments are excessively high.

Conclusion:

Tax refunds offer a unique opportunity to improve your financial well-being and achieve long-term goals. By understanding the intricacies of tax refunds, strategically managing your finances, and making informed decisions, you can harness the power of your refund to secure a brighter financial future. Remember, wise financial planning is the key to making the most of your tax refund and setting the stage for a more prosperous tomorrow.