Understand Profits Before Paying "Taxes" (PART 5 – FINAL)

How to reduce taxable net profits so that we can save taxes as much as possible and legally?

1. Recording financial transaction correctly

Before thinking about tax planning for our business, the entrepreneurs should first concern about expenditure. They should record the income and expense accounts of their businesses accurately and correctly. Apart from knowing the income and expense accounts as well as profit of their businesses, they can analyze strengths and weaknesses of their businesses for the improvement for the future success of their businesses. Moreover, this will facilitate when they want to cut some expenditure an increase the profit of their businesses.

2. Managing tax within the related tax incentives

After calculating the business profit, the next thing to do is incentive in tax management. If the entrepreneurs consider from the Income Tax Return for companies P.N.D 51, page 6, item 10 which is Revenues that are granted income tax exemption or expenses that are deductable at a greater Business granted income tax exemption, they will see that there are many options to choose ,for example; expenses related to employee; expenses for educational support; capital investment expenses; expenses for employing students, disabled persons, older persons; and expenses for donation.

3. Calculating the tax correctly and filing a tax return on time

Calculating tax correctly can help saving taxes following types of business’ tax rate, for example; small business or SME with paid up capital not exceeding 5 million baht and gross service income not exceeding 30 million baht, will have a privilege to pay tax in a smaller amount than other types of business. In addition, paying taxes on time will also help with tax-saving as the entrepreneurs do not have to pay for “penalties” or “surcharges”. Not paying taxes on a stipulated date, or delay, or not paying in a full amount, the money used for paying such expenses will increase unnecessarily.

Although this article is a good guideline for the entrepreneurs who have to relate to taxes like tax management and planning, the entrepreneurs should also study more about this issue, or if it is too complicated, they can go to professional accountants and tax planners for an advice, for managing taxes correctly and legally, and for helping in business administration so that their businesses will be succeed in the future.

Credit: https://flowaccount.com