данъчна оптимизация

Optimization of the tax burden

Global economic crisis

The global economic crisis in 2008 put an end to uncontrolled spending of company resources and the intoxication by the investment boom. The main task in the new economic situation became the preservation of economic growth and survival in conditions of increasing inter-company indebtedness and troubled bank credit provision. Trade persons started seriously thinking about minimizing their costs and cutting jobs. Multiple commercial entities did not manage to cope with the situation and went bankrupt. Entities in Bulgaria still underestimate the need for optimization of tax burden and creating long-term strategies for tax planning.

Small- and medium-sized businesses hire accountants for standard and routine accounting tasks, which sometimes has certain negatives aspects in such a dynamic economic environment. Small companies evade taxes through shadow economy transactions and illegal methods, often choosing behavior of non-compliant taxpayers, and place themselves in a hazardous situation. Large and reputable companies avoid this by using the experience and knowledge of consulting firms specialized in tax planning.

Larger businesses tax optimisation

Larger businesses that are often operated by foreign auditing firms make long-term planning. There is a saying that “Nothing is certain, except for death and taxes”. However, the same way as death can be postponed through certain measures, payment of taxes can be spread over time, so you have more resources by which you can increase the economic growth of your business. This can be performed entirely in accordance with laws and their mandatory provisions. This set of actions is called “tax optimization”. Very often business representatives ignore the possibilities for tax optimization. Tax optimization is often a dirty expression and is confused with tax fraud, which means tax evasion by illegal means. To achieve optimization of tax burden or to avoid tax legally, one needs to be highly familiar with laws and use all of the possibilities legislation offers. Not only internal legislation but also European laws need to be taken into consideration.

European Court of Justice

The rulings of the European Court of Justice were intensely entered and started being implemented within the past few years. The court interprets and monitors the compliance with community legislation. In order to ensure effective and uniform application of community legislation within the EU, national courts may, and are sometimes obliged to make prejudicial inquiries to court in relation to the interpretation of EU legislation.

Lack of familiarity with the law in the most global sense, and not knowing the opportunities that it gives, are the barriers that prevent tax burden optimization. Means of tax optimization are entirely at your disposal. If you have the right consultants, your business will develop more successfully, you will earn more and you will create new jobs. And the state will also benefit from your business development and the job opportunities you create.

Tax legislation

Tax legislation is constantly changing and businesses entities cannot afford not to adapt their behavior to it, because such ignorance leads to loss of business and creating a negative image before tax administration.

International tax analysts consider the trend that indirect taxes such as VAT are becoming more and more important and higher. Many countries rely increasingly on indirect taxes to fund their budgets. Non-refundable indirect taxes will increase business costs and make production more expensive. This will in turn require increasing the effectiveness in order to compensate for higher costs. Minimizing the tax burden is one of the ways to improve effectiveness. The following issues are extremely important: tax optimization in cases of transactions with assets/shares with domestic and foreign entities, optimization and tax structuring of the process of sale/transferring with view to funding and other aspects, consequences for VAT and real estate transfer tax, tax planning in case of investments in real estate, optimization of profits and development of strategies for repatriation, maximum use of losses from corporate income tax, VAT optimization strategies within and after its recovery.

Any serious business should seek and use the correct and effective tools for tax optimization, tailored not only with the Bulgarian, but also with European legislation, as well as the fiscal approach of tax administration.

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