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The Importance of Tax Planning for Micro and Small Enterprises

The set of taxes for small business, duties and contributions are the aspects with which a company can represent about 33% of the business’s revenue. Thus, if you want to remain competitive, learn how to reduce a company’s costs and increase profitability, you must be aware of what it is and how to carry out tax planning for micro and small companies.

The objective of tax planning for micro and small companies is precisely to reduce the percentage impact of taxes on their accounts, and to allow their business to bear less taxes and the like. Before we continue it is important to stress that tax planning for micro and small companies has nothing to do with tax evasion. The plan represents a set of legal practices that allow you to choose a less expensive tax regime for your business.

What is tax planning and how to do it?

Tax planning for micro and small businesses is a way of verifying what will be the most economical way of collecting taxes on the organization’s operations, before the company actually starts operating during the current fiscal year. It is not possible to change the type of tax regime after the beginning of the fiscal year, so it is important that tax planning for micro and small companies is done carefully. Only then will you avoid an error that could compromise your organization’s next 365 days.

Who can do it?

The purpose of tax planning for micro and small businesses is to understand what the best tax regime is for the fiscal year that begins. In other words, planning seeks to predict which tax regime will allow the company to pay a lower percentage of taxes. There are types of companies that must be part of a specific type of tax regime. However, if your company has the option to choose, tax planning is done for you, even if your business is small. With a plan your accountant will be able to identify which of the three options is the most economical way to collect taxes.

How to carry out tax planning?

All companies that are not obliged to adopt a certain type of collection regime, can carry out tax planning for micro and small companies, and choose a more economical way to meet their tax obligations. The first step in this process is to know the regime options. Subsequently, some issues of your business will be analyzed, such as:

  • Data obtained in the year being completed;
  • Future scenarios must be considered;
  • Activities performed;
  • Offered products or services;
  • Billing volume;
  • Number of employees;
  • Profitability;
  • Structure and other factors.

It is important that you seek the support of an accountant. He is the right professional to help you manage a small business, with regard to tax obligations.

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