Assessing The Significance Of Global Tax Planning And Management


The development and maintenance of a reasonable tax strategy for a business that crosses the geographical boundaries will never be so easy. You have to deal with the constant shifts in the landscape of tax in different jurisdictions and create a definite structure for the payment of taxes. The tax structure must include the following aspects.

• Creating proper timing for your requirements related to tax and cash

• Suggest you ways to avoid double taxation

• Allows you to take advantage of the opportunity of tax deferral

• Controls the overall exposure to tax

• Seizes the opportunity of a foreign tax credit

The global tax planning and management should create a balance between the constant changes to which you may need to adapt to operate internationally and the flexibility along with sustainable and predictable ideas that are needed to run your business.

Understanding the Scenario

Companies across the globe constantly look for options to expand their businesses in different territories in the age of globalization. The opportunity to occupy a leadership position has driven a lot of companies to run their businesses in a foreign land. When you operate your business in multiple countries, it brings a whole lot of opportunities to gain major market share and reduce the cost as well.

However, the tax law is one of the biggest enemies that often make overseas expansion a bit too difficult. Whether it is a foreign company wanting to do business in a country or a resident company willing to go abroad, understanding the laws that can affect the operations and the strategies of business are essential.

Sustaining the Business

It is not just establishing but maintaining an effective tax structure which is vital for every project. You may need to get meaningful insights to adapt to the strategies of tax that fits into the future plans you have for the business. It also implies that you need to build a structure that suits the business operations as well.

Analyzing the international tax structure within three to five years helps you ensure that it still embraces the corporate strategy and also balances the changing requisites of international tax. However, there are significant factors that affect the position of international tax such as the changes taking place in the tax regulations, ways in which to enter new markets or whether to go for a merger and acquisition across the border.

To prepare a sound strategy of tax planning, it is necessary to re-evaluate the international tax strategies. Reducing the exposure to the global tax structure is one of the key concerns as businesses can implement numerous tax strategies to manage the structure of global tax. Locating the major business functions, risks and the assets in those jurisdictions that are tax-friendly can help you to overcome the burden of paying taxes and help you retain more capital for the business.

Direct Tax Planning Strategies

You are aware of the significance of saving taxes as it helps you align the measures you take to your financial objectives. The following steps will explain.

• If you have just started following the direct tax planning strategies, you must try to avoid those hasty decisions taken during the last minute.

• It is necessary to maintain a system of asset allocation, and you should try to balance your investments on the basis of your risk profile.

• Choosing the right insurance products is an effective tax planning strategy.

• Try to distribute the investments you make over a period of twelve months to avoid the risks that arise during the last months.

• The equity-linked saving scheme is considered as one of the major tax-saving mechanisms for those who can bear the instability of the equities.

Tax Planning for Corporate Entities

Tax is something you can never take lightly as there are fines, penalties and cost of interests you may have to bear due to an inappropriate filing. What can you do to avoid the tax burden?

• Several deductions are applicable when it comes to corporate tax planning in India, but you may not know them without professional guidance. Deducting the cost of business from the gross income proves advantageous for corporate entities.

• Try to avoid getting an extension on the taxes you pay as the request may not get approval. However, you can delay the sale of assets and the collection of payments until the end of the year. You can also expedite the purchase of real estate and equipment to facilitate tax planning.

• A lot of businesses in this country are labor-based and paying the wages of the unorganized labor in cash is a major hassle without recording the payments properly. You must try to get cash receipts with the thumb impressions or signatures as applicable and maintain a register of wages.

Hiring a Tax Consultant

For managing the taxes, you can choose to do your research or depend on the top tax firms in Delhi NCR if you intend to operate your business in this jurisdiction. The experts have a different take on tax planning relevant to the state where you conduct business.

For large businesses that are based on employees, the guidance of experts helps you access the best tax strategies that hold good in the territory. Each jurisdiction has different tax issues along with different legal and banking environments.

You have got to navigate all these concerns together for the creation of effective relationships with the local people. The tax consultants will address your queries and concerns properly so that you can coordinate with the people and build an effective network.