Corporate Tax Planning Is Not An Option, It Is A Must
2nd December 2011 by Tax Man No CommentsAustralia is a country with a sound taxing system. The taxation system prevailing in the country is not unlike most countries where the greater denomination of tax revenue arises from income tax. Here is a brief description about its major tax systems and superannuation schemes.
Income tax in Australia is calculated applying a progressive tax rate slab where higher rate of tax is imposed on higher income.
The income tax rate for the year 2009-10 is as under-
If we talk about the advantages of taxation, managing your own funds gives you a greater control over your investments; besides you have a variety of options before you, giving you some broader idea of investment.
The prime idea is to provide money for your retirement just to cut down your investments in various assets for a lavish life at present and thereby making the final innings of your life insecure.
Tax Planning with Inventory Control and Valuation
Properly controlling inventory costs can positively affect a company’s tax deductions. A tax planning accountant can advise how and when to buy inventory to make the most of deductions and changes in stock value (valuation). There are two main inventory valuation methods: first-in, first-out (FIFO) and last-in, first-out (LIFO). FIFO is better in times of deflation and in industries where a product’s value can drop steeply, such as in high-tech areas. LIFO is better in times of rising costs, because it gives inventory in stock a lower value than the prices of goods already sold.
Predicting the Future by Looking at the Past
Good tax planning means that a company takes the past sales performance of their products and/or services into account. In addition, the state of the overall economy, cash flow, overhead costs and any corporate changes need to be considered. By looking at previous years according to the “big picture,” executives can forecast for the future. Knowing an expansion or a cutback will be needed makes planning for it easier. The company can stagger expenses, purchases, staff reductions, research and development and advertising as needed.
Self managed Super Fund is a type of superannuation fund which provides pension schemes to individuals usually run by a small group of not more than five people. A Self managed Super Fund is usually regulated by the Australian Taxation Office. The Self managed Super Fund needs to have all the members as trustees of the fund. Also no member of the fund can be the employee of another person involved in the fund. If any corporate trustee forms part of the fund then it is required for each of the other members of the fund to be a director in the corporate trustee. This type of fund is widely getting popular amongst tax payers in Australia as this super fund provides a tax shield to some extent.
Self managed Super Funds provide the people with great control and freedom to choose the assets and investments they want to invest in which other super funds fail to provide. This type of funds is the fastest growing segment of the Australian superannuation category.
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