Introduction Of Tax Representation And Reasons Why It is Important
Tax planning is important and the most important step in that direction is to hire a tax representative who will help you pay your taxes in time so that you never have to worry about getting into a hassle with the tax authorities and your tax/fiscal representative can help you defer or flat out avoid tax by taking advantage of beneficial tax. Tax representation also helps because it ensures that you get an increase in tax deductions and tax credits.
Types of tax representation
There are two kinds of tax representations that relate to EU transactions. The first kind is called limited tax representation and the second kind is called general tax representation. In limited tax representation the main aim is to defer the VAT. The EU regulations say that in order to avoid VAT at customs the company in question must have an establishment inside EU. In the case of representation on a general fiscal basis companies could hire a consultant who offers a greater number of representation services and who could help the company finish more complex transactions.
How a tax representative helps
Once a tax representative is appointed he will be jointly and severally liable for the VAT owed. A tax representative takes care of ensuring compliance with local fiscal laws for the purpose of VAT. A tax representative also takes care of ensuring the compliance with the business wrt local rules on invoicing, VAT treatment, procedures of accounting and VAT filing and payments. Another advantage of having a tax representative is that he takes care of enquiries and tax inspection from the local VAT office. Also, a good fiscal representative can improve the cash flow of your company by increasing the profits. This is done by making sure your company promptly accounts for the input VAT. A well qualified tax representative will file your tax returns and act as a company’s guarantor for its VAT obligations. A tax representative also makes sure that the invoices of the company are in accordance with EU invoice guidelines.
I would like to conclude by saying that a tax representative comes into play right from the stage when you want to register for VAT and once the tax representative has got you registered for VAT purposes he will then help you submit tax declarations and manage your VAT payments. Moreover a tax representative ensures that all tax regulations are complied with and the tax representative will take care of all communication and correspondence with tax authorities. Hiring a tax representative will help you save both time and money but these are not the only advantages. Fiscal or tax representatives also save you the trouble of understanding the impossibly complex financial laws and once you have hired a tax representative you can rest assured that all your tax related matters are their headache. Finally, tax representation can help reduce the tax burden to a minimum, plan for future and coordinate growth in an efficient manner.