Owning a business is no easy task and needs to be handled with caution. When it comes to tax strategies, there are many things you need to look out for. The corporate tax draws up to one-third of the profits of a company.
There are legal methods whose magic formula holds in two words: tax optimization to limit the mowing of its cash.
From the reduction of the taxable profit to the total exemption of the IS, you are given ten tips to preserve the wealth created by your company from the pockets of the authorities.
Here are some tips:
Play on your depreciation
Investment = Immobilization?
Revise your classics. The legislation allows, in some cases, to spend your investments in deductible expenses, such as research and development expenses. But even when investments are to be classified as fixed assets, it is possible to play on the duration of depreciation to reduce the IS. Based on the tax administration scales, opt for the shortest duration to accelerate the depreciation and quickly reduce the taxable profit. The idea is to depreciate the entirety of the decreasing amount.
Report your deficits
A deficit is not a catastrophe for your company!
It can help you reduce taxable income in a year and even in the previous year. A deficit result can thus exempt you from corporation tax during several beneficiary years while respecting a ceiling of one million euros (for a carryback, with a possible increase for a carry forward). For example, a significant deficit over a financial year, as a result of large investments, may give rise to a tax claim via a carry-back or an exemption for several subsequent years via a carry-forward.
Increase your provisions
Be careful; you will be a double winner!
Provisions help to deal a blow to your company, but they are also a way to reduce your taxable profit, and therefore your corporate tax. But beware: the amounts provisioned must meet certain conditions so as not to attract the tax authorities’ wrath. They must relate to deductible expenses and be the subject of an accurate estimate of the risk provisioned. It relates to a probable loss resulting from events taking place before the closure of the accounts.
Think about provisions for expenses, easy to anticipate. You cannot, however, provide a dismissal … But for this specific case, you can reduce your IS by subscribing to specific insurance; the premium is chargeable on the taxable result.
Boost your income
More in your pocket, less in that of the state!
By increasing your business income, you also mechanically lower the taxable profit. For the operation to be interesting, make sure the sample levels do not turn this trick into a white operation.
Finance the complementary retirement of your employees
Kill two birds with one stone with supplementary pensions!
Their contributions are deductible from the IS, which makes it possible to increase your employees’ income without it costing you.
The advantage for you? Offer a more attractive remuneration to your employees, likely to attract and retain them.
Get tax credits
Finance your investments with tax credits!
Innovation, research, family, apprenticeship, commercial prospection, business training, CICE … There is a multitude of tax credits applying to the IS. As many opportunities to seize to develop his company at a lower cost, rather than pay a corporate tax without “return on investment” …
Create your company in an assisted area
Be rewarded for your entrepreneurial audacity!
By setting up your company in a neighborhood in difficulty or a rural area, you can benefit from a tax exemption on companies. Starting a business in a regional aid area (ZAFR) entitles you to a full exemption from tax credits for the first two years, then decreases over the next three years.
Get involved in charity or philanthropy
Make a donation; the state will give you back!
Finally, it will refund you in the form of a reduction in corporation tax of 40 to 90% of the value of the gift if it complies with the conditions set by the tax authorities.
Buy a cultural property considered a national treasure? 40% tax deduction.
Donate to a work of general interest? 60 %.
Contribute to the public purchase of a national treasure? 90 %!
What interest for your company? Benefits regarding the image are more if you build communication around your charitable operation or sponsorship. The donation can also take the form of an employee’s provision, ideal for employing an employee during periods of depression.
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