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HOW TO MINIMIZE TAXATION

To reduce the taxation of the organization, you can use “black”, “gray” and “white” methods. The best option in terms of minimizing costs and at the same time complying with the legislation of the Russian Federation is the “white” method. Let’s compare ways to reduce taxation and evaluate the possible risks and expected benefits from their use.

Tax Reduction Methods

Depending on the legality, 3 groups of methods are distinguished:

  • “Blacks”. These are illegal methods aimed at reducing tax payments – for example, wages “in an envelope” or work without official registration in the company’s staff.
  • “Greys”. For example, according to documents, an accountant is registered for a part-time job, for a month, or he works part-time, under a contract.
  • “Whites”. Completely legal methods are aimed at reducing the number of employees through the redistribution of powers and the transfer of certain functions to third-party companies (outsourcing).

There is no point in considering “black” ways, since this is a violation of the current law and, accordingly, is a crime.

visit also it: Tax Return Agent in Melton

As for the so-called. “gray” methods, then from the point of view of social benefits, hiring or transferring employees to part-time employment does not give any effect. If you register part-time staff, then it will be beneficial only if your company is not the main place of work.

Regarding personal income tax payments, it should be noted that reducing wages to the minimum or below is possible only with the consent of the employee himself. This is only possible with a contract. In this case, the employer one way or another will have to pay compensation to the employee, bonuses, which for “black” cash is fraught with the same consequences as with “black” methods of tax reduction. 

Outstaffing and outsourcing: “white hat” methods to reduce the tax rate

The “white” includes those methods in which taxation is reduced legally by reducing the number of staff. There are 2 such methods:

Read More: Services are provided by Melbourne Accountants for Business.

Outstaffing. 

This concept means the transfer of an employee to work in a company with a different form of ownership, for which lower tax rates are set at the legislative level. For example, an LLC accountant goes to work for an individual entrepreneur, but continues to perform his functions at his main job in the company. Also, the employee himself can register himself as an individual entrepreneur and provide services under the relevant contract.

Outsourcing. 

This is a remote service, in which the employees of the outsourcing company provide the required services on a one-time or permanent basis by the contract, but they are not on the staff. Outsourcing in this case refers to other expenses or expenses for ordinary activities.

If you do not have a highly qualified specialist (for example, an accountant) who agrees to out staffing, then we suggest paying attention to the outsourcing of accounting services in the “Capital Tax Consultation”. Cooperation with us will allow you, on a completely legal basis, to minimize taxation at the enterprise, eliminate tax risks and increase the efficiency of accounting activities, and, consequently, the efficiency of your company as a whole. Contact us – we will help you!

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Eleena Wills
Eleena Wills
Hi, I’m Eleena Wills. Being a writer and blogger, I strive to provide informative and valuable articles to people. With quality, constructive, and well-researched articles, one can make informed choices. I cover a wide range of topics, from home improvement to hair styling and automotive.
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