Companies and private enterprises, do you know how to use all the benefits to reduce your tax base? You can find some tips below.
The first principle is that if a transaction is made with the purpose of a company or an individual avoiding taxes, such business will not be recognized by the tax authorities. In this article we want to draw your attention to the list of business events with opportunities of a tax reduction, and the benefits provided to you by law.
1. Computers and other fixed assets
By buying equipment for work you can decrease the tax base due to the amortization and at the same time this gives you the possibility of a 40 percent tax benefit. The list of equipment for work does not include furniture, office equipment and personal vehicles that are not powered by electric or hybrid power.
2. Travel expenses and daily allowances
These payments are not subject to income tax and contributions, they reduce the tax base of the company. To use travel expenses in the form of benefits, you must have a trip application with all the necessary information – the destination, the name of the client and the purpose of the trip. The application must be issued before the start of the trip.
3. Team building and other educational programs
Costs are fully exempted from taxes if the company proves that the team building had a positive impact on the operation and success of the company.
4. Representation expenses
Representation expenses are taxed partially, in the amount of 50%. Representation expenses include banquets and gifts to business partners.
5. Value of stock, real estate, equipment
In case the value of your stock at the end of the year no longer corresponds to actual circumstances, you can reduce its book value, therefore, your tax base will immediately decrease.
6. Write-offs, deterioration of financial investments
The deterioration of financial investments is recognized only when they are removed. Also, worse situation of receivables, or write-offs are recognized only at the end of a compulsory settlement or bankruptcy of a company that owns you the money.
7. Preliminary orders
Some of them can be exempt from taxes completely, others partially (at a rate of 50%). You can make preliminary orders for anniversary remuneration, severance payments, and repairs for the products within the warranty period. You need to explain the amount of the preliminary order.
8. Research and development
You can apply for a tax exemption at a rate of 100% of the investment amount.
The taxpayer can apply for the reduction of the tax base in the amount of 40% of the amount invested in the equipment and intangible assets, but maximum in the amount of the tax base.
The tax reduction is possible in the case of a new employment of a difficult to employ younger or older person or in the case of an employment of a disabled person.
11. Voluntary supplementary pension insurance
Benefits apply to voluntary supplementary pension insurance which the employer pays partially or fully for his employees.
Benefits for paying taxes are effective for payments in cash or in kind for humanitarian purposes. In this list there are the donations to disabled people, to social welfare organizations, charity, scientific, educational, medical, sports, cultural, environmental, and religious organizations.
13. Accrued costs, annual leaves
As of December 31, 2018, the company creates passive accruals for unused holidays from 2017 to be used in 2018.