Tax Accounting is about establishing and checking the tax position of your organisation. Through Tax Accounting, you will gain an insight into the tax position within your annual accounts. This sounds straight-forward, but it could not be further from the truth, particularly if you operate in multiple countries. Do you meet the correct requirements and what possibilities do you have to optimise them? The specialists of Mazars will prepare you for a statutory audit by an auditor, the Tax Authorities or other authorities.
What is Tax Accounting?
Tax Accounting is the process involved in determining and auditing the (consolidated) tax position of a legal entity or often a multinational group.
The ‘tax position’ is ultimately included in your stand alone and consolidated annual accounts and consists of:
- The total tax expense in the profit and loss account (divided between current and deferred taxes).
- The current corporate income tax receivable/liability in the balance sheet.
- The deferred corporate income tax receivable/liability in the balance sheet.
Steps in Tax Accounting
No matter how small or large your company is, you are obliged to complete a number of pre-defined steps in order to optimise the tax position. The more countries and markets you operate in, the more complex this process becomes. The following steps need to be completed therein:
- For a legal entity, a local tax pack is created in the local currency and transferred to the consolidation environment via the handover.
- At head office, the data of the local tax packs are consolidated and converted into the reporting currency.
- Ultimately, the explanatory notes to the annual accounts are produced and included in the consolidated annual accounts.
Once you have completed these steps, you are deemed to have complied with all tax laws and reporting standards, across the globe.
Ready for audits and inspections
Tax Accounting also assists you in the preparation for statutory audits by auditors, the tax authorities, banks and other supervisory bodies. When such an audit shows that you failed to comply with the regulations, the tax and financial risks involved may be substantial. We can help you reduce the risks by:
- Supporting you with and checking quarterly reports and annual corporate income tax calculations.
- Investigating and documenting the tax-technical positions you take as part of the year-end closing.
- Improving your Tax Pack, so that it continues to comply with the legislation.
- Technical discussions on the subject of calculation methods, tax laws and accounting standards.
- Supporting you in the implementation of a new system solution for your corporate income tax.