Income Tax Returns

What are Income Tax Returns?

Official tax forms submitted by the company to the relevant national tax authority in each country specifying the amount of taxable income that your company has earned in the relevant period, calculated according to the tax laws in that country, and the corresponding income tax owed.

It also includes any accompany evidence provided to the Government in support of the tax return form.

Why are Income Tax Returns important for business today?

Having an up-to-date and comprehensive collection of Income tax returns enables your company to:

• Ensure consistency is maintained with prior year’s tax returns in terms of the approach taken
• Keep track of tax payments owing or refunds due
• Adjust both short and long-term capital losses in a financial year against capital gains made in subsequent years, reducing taxable income
• Establish financial credibility as these documents are validated by auditors
• Ensure financial and regulatory compliance

Why are Income Tax Returns important for an event tomorrow?

Having an up-to-date and comprehensive collection of Income tax returns enables your company to:

• Validate the financial data of your company, since returns are authenticated by auditors and tax authorities
• Evaluate your company’s profitability, scalability and expenses that are critical to due diligence
• Assess the transactions between your company’s internal members, such as loans made to and by the corporation and asset transactions
• Understand the tax positions taken by the company in order to understand whether any represent a potential source of future tax risk
• Reduce the cost and time of due diligence for both company management and potential investors

Pros of addressing Income Tax Returns

• Keep track of tax payments owed and refunds due
• Ensure consistency in tax treatments adopted
• Provides robust documentary evidence of your financial performance
• Minimises the time and cost of due diligence

Cons of not addressing this topic

• Increased potential to miss payments
• Increased risks of penalties, fines, scrutiny and litigation in the event of inappropriate tax treatments adopted.