Five tips to face the fiscal closure if you have a small and medium-sized company
“SMEs can partner with tax advisory firms to find customized solutions,” said Orlando Ramírez, chairman of the GS1 Electronic Invoicing Committee. Gerson Vargas/La RepúblicaMost of the institutions that currently use digital signatures have started to replace paper documents with electronic ones, starting with simple documents that do not involve serious errors that could affect people or things. Some institutions have started with the vacation requests of civil servants. In case of any error in the process, the official simply recreated the request and signed it again.
On September 30 the fiscal period expires and small businesses, as well as other income tax payers, must file their tax returns; having all the documents up to date will help you to avoid this period from becoming a headache.
In order to have a proper fiscal closing, the income obtained from October 1st to the last day of September of the following year must be presented; then taxable expenses are subtracted in order to determine the net profit.
After this stage, the Ministry of Finance determines the amount to be paid under the modality of physical or juridical personhood.
SMEs can make this process easier by applying five recommendations.
First: They should seek professional advice to help identify which are the expenses: many growing companies associate personal or family expenses within the corporate ones, this is not correct, since the first ones are not deductible from the business equity.
“It is essential that businesses show their financial reality in a transparent manner, as it is key to obtain credit facilities with banks and that these can analyze their ability to pay for future projects,” recommended Manfred Lacayo, CEO of Desyfin.
Second: Proper inventory management is another important recommendation in this process; experts recommend making extraordinary sales even at a lower price to get rid of excess products, if necessary.
Third: Creating a fiscal budget, through voluntary savings each month that does not compromise profits and minimizes the risk of going into debt to meet tax responsibilities, is a simple action that SMEs can implement.
The fiscal year-end is a good time for businesses to make an internal self-evaluation, in which they can detect opportunities for improvement and maximize their resources for the new period.
The use of electronic invoicing or digital signature are current alternatives that small businesses have to streamline their tax duties, this measure can be quite useful to these businesses, but there are still areas for improvement.
“Small and medium-sized companies that use invoicing software on a small scale must invest in software licenses, although the Ministry of Finance has yet to clarify a bit the panorama on what is required for its correct application,” commented Orlando Ramírez, president of the GS1 Electronic Invoicing Committee.
Fourth: Planning a strategy that allows for the timely cancellation of taxes, considering the advances made in each income period, can help SMEs not to suffer in this process.
Fifth: The last tip is to project from now on the next tax return, taking as a basis the current results and the economic, political or tax variables that the market would have.
Those who fail to comply with this regulation are exposed to several sanctions, among them the temporary closing of the business.
DATA OF INTEREST
The Ministry of Finance recommends small businesses to be aware of several aspects for the fiscal closing.
Deadline? September 30
Who must do it? All income tax payers
When is the return to be filed? Two and a half months after the tax closing date
Penalties? Fine of half a base salary/Temporary closing of the business.
Note taken from: LA REPUBLICA