Tax Certificates

What are Tax Certificates?

A tax certificate, also referred to as a tax registration certificate, is a crucial document issued by state departments of taxation or revenue. It confirms that your business has registered for tax purposes and demonstrates your compliance with tax regulations, serving as evidence of your tax payments and regulatory adherence.

Types of certificates:

• Tax Status Certificates: Refer to the certificates that provide current tax status of your company and your subsidiaries in their jurisdictions of incorporation
• Tax Exemption or Resale Certificates: Refer to the tax exemption or resale certificates that exempt your company from paying tax on certain products or assets that are resold by your company

Why are Tax Certificates important for business today?

Tax certificates enable your company to:

• Gain visibility on the requirements and terms and conditions related to the tax exempt or resale certificates
• Evaluate the rights of your company to purchase and resale tax exempted products or services
• Determine the progress and status of tax related to your company across jurisdictions
• Keep a record of tax payments made by your company for future reference

Why are Tax Certificates important for an event tomorrow?

Tax certificates are important for an event tomorrow, as they help:

• Evaluate the tax liabilities and tax status of your company across jurisdictions
• Assess the breadth of your company’s offerings and the different tax application across jurisdictions
• Evaluate the offerings and assets that require tax exemption or resale certificates and their current arrangements

Pros of addressing Tax Certificates

• Establish company credibility as these certificates are issued by government authorities
• Mitigate legal and operational risks with tax regulation non-compliance
• Ensure transparency between your company and tax authorities, vendors and customers across jurisdictions
• Enable your company to receive certain exemptions on sales tax

Cons of not addressing this topic

• Inability to claim tax benefits and incentives
• Risk of penalties, fines, scrutiny and litigation
• Increased time taken, and cost incurred, in due diligence by both internal company management and potential investors.