Wise Tax Planning Strategies for you & your Business – Wise tax planning is one of the important things in financial management, both for small businesses, medium businesses and large businesses, both individuals and groups, if done strategically and wisely, it can help you in maintaining your tax system and managing your finances easily.

In this article, we will discuss wise tax planning that is specifically designed for you to help you optimize your tax obligations.

Understanding Tax Planning

Tax planning is a strategic planning process to organize personal (your) or corporate financial affairs in order to manage tax obligations properly, wisely, efficiently and correctly. This involves analyzing your financial situation and making the right decisions to ensure that you pay taxes appropriately and take advantage of various tax incentives and deductions provided by the government based on applicable regulations.

What are The Types of Tax Planning? 

National Tax Planning 

National Tax Planning which in its implementation is very guided by domestic laws. in this national tax planning is usually carried out by corporate taxpayers who only have their business in Indonesia or in other words companies that only transact with domestic taxpayers.

International Tax Planning 

International Tax Planning which in its implementation is usually often carried out by corporate taxpayers who have activities or businesses both domestically and abroad. International tax planning is generally carried out if the taxpayer makes transactions not only with domestic taxpayers but also makes transactions with taxpayers from abroad and must be based on applicable laws or tax agreements or tax treaties.

The Purpose of Having Tax Planning

Solving Tax Problems

If you have a tax bill or arrears or other tax problems, planning can help you overcome this and find solutions and what steps to take.

Supporting the Smooth Running of your Business

Starting or running a business is challenging for many reasons — tax obligations don’t have to be one of the reasons for not running a business. With proper, wise, efficient and correct business tax planning, you can improve your business and collect more resources for growth.

Managing Tax Costs

Managing expenses to pay taxes so that the costs incurred are more efficient and correct or appropriate. By calculating and preparing tax payments according to applicable regulations, you can protect yourself from unexpected tax obligations or legal implications (sanctions or fines).

Notes: Not to avoid paying taxes but to arrange so that the taxes paid are appropriate and correct, not more than the amount that should be.

Types of Taxes that are Obligations

1. Income Tax

Several types of income and their taxation in Indonesia include:

• PPh 21/26 on individual compensation
• PPh 23/26 on services, rent and corporate compensation
• PPh 4(2) on rent, dividends and other income
• PPh 25 on tax installments
• PPh 22 on certain objects & certain parties
• PPh 24 on foreign credit
• PPh 15 on certain industries
• End of year income tax

2. Value Added Tax
3. Regional Taxes and Customs

Requirements for Tax Planning

1. Understanding of tax regulations
2. Compliance with the law
3. Not involving tax evasion
4. Openness and compliance
5. Professionalism and ethics
6. Supervision and transparency

What are the Stages of Tax Planning?

Data Collection and Analysis

The first stage of tax planning is collecting financial data related to income and business activities carried out and obtained. After all the data is collected, the next step is to conduct an analysis of the data to determine the right, correct and appropriate tax planning strategy.

Determining Tax Planning Objectives and Strategies

After conducting the first analysis, the next stage is to determine the objectives and strategies of tax planning that will be carried out. This is done by looking at, reviewing and considering various existing aspects, such as tax incentives that can be utilized or used, permitted tax deductions, in accordance with applicable regulations and laws, and other aspects.

Implementation of Strategy

After the tax planning strategy is determined, the next stage is implementing the strategy. The implementation of the tax planning strategy must be carried out carefully and in accordance with applicable tax regulations or provisions so that problems do not occur in the future.

Monitoring and Evaluation

The last stage of tax planning is monitoring and evaluating the results of the tax planning strategy that has been carried out and implemented. This objective is carried out to determine whether the planned strategy implemented is effective, appropriate and correct in carrying out tax planning.

Conclusion

A wise tax planning strategy for you & your business is very important and needed. Why? Because to help you manage your finances effectively and also to ensure that the taxes you pay are in accordance with applicable provisions. Having wise tax planning, both for individuals and companies, can help you manage your tax obligations better.

Need outsourcing services to take care of taxes? both individuals and companies?

Working with a trusted legal consultant, Indoservice offers outsourcing services for personal taxpayers, corporate taxpayers and corporate PKP on Indonesian regulations. At Indoservice, we have a dedicated team of professionals who will handle Tax and Accounting for you. You can rely on us to provide the quality of service that best suits your needs.

Contact us at email: admin@indoservice.co.id or Call/Whatsapp +62877-1449-8500 for more details.