Tax accounting


The branch of accounting aimed at controlling and supervising the tax commitments of a company is known as tax accounting. It detects, evaluates and produces the corresponding payment of taxes for it.

The practice of tax accounting in a company focuses on all accounting practices related to the treatment of tax obligations that it has.

Depending on the nature of each company, there will be a different approach to this type of accounting. This logically happens because depending on the sector in which you participate and the product you offer, you will find yourself in a field of different tax obligations.

In this sense, it is clear that taxation is a key element to take into account when establishing or not a commercial company in a particular place. For example, elements such as the fixed fiscal year or the reduction of tax rates for startups.

Main objective of tax accounting

The most notable motivation of the tax accountant is the justification of the withholdings made by the company for a certain time and that therefore must be presented to the public treasury. An example would be the VAT to be declared quarterly by a food store.

In the same way, corporate support must be given to the payment of the various taxes that the company has to face periodically. Another simple example is the inheritance tax or the self-employed fee in cases of sole proprietorships.

The foregoing will depend, however, on the applicable law in each country. A very good tax accountant in Spain may not be so in the United States because the tax law is different.

Features to be highlighted in tax accounting

Along with the above, tax accounting also deals with a series of points described below:

  • It adapts to the tax regime or fiscal regulations of the territory in which the company carries out its economic activity.
  • They often work closely with the firm's legal department or cabinet, whether internal or external, in order to improve efficiency and become aware of current tax and commercial law regulations.
  • The accounting design and the preparation of the data are mostly based on models established by the Administration, facilitating their subsequent presentation.

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