“Starting up a business is the easiest thing in the world,” said no one ever.
We all know that there are too many things to take care of not only when starting a business but also even after it has been established. Most of the time, a large amount of money is involved in this venture that making mistakes can mean grave consequences which often include financial damages, or worse, can cause the business itself to close down. With that being said, every single detail shall never be overlooked such as business registrations, tax papers, permits, contracts, to name a few.
Out of all the mistakes that new business owners tend to commit, proper tax payments and registrations are some of the most common ones. Apparently, these are also the errors that cost a lot to a company, making the tax audit process one of the most hated by business owners. Whether businessmen comply with the law and are careful with their taxes or not at all, receiving a letter from the Bureau of Internal Revenue (BIR) can still instantly send panic and fear to them. Taxation is not a simple obligation and it’s not easy to determine if you have done things the right way unless, of course, if you have a professional (such as a tax lawyer) taking care of the matter for you.
A tax audit is requested by BIR when the agency wants to take a closer look at your business operations that involve your taxes. No, it does not necessarily mean that you (or your business) are not following the law or has already broken it, it’s just that the BIR is simply doing what it is supposed to do: to make sure that the right amount of tax is being returned to the government. A tax audit can be requested over and over again and there is nothing wrong with that, what is not right, however, is to worry about this process every single time. Some of our worries can be felt due to lack of knowledge, misinformation, and/or lack of assurance, which can be easily avoided if only you have the right persons to educate you about it.
Tax lawyers are the answers! Yes, it did sound very commercialized but truth be told, these professionals are the answer to your sleepless nights, anxieties, and stress caused by business taxation matters. Of course, accountants are of great help too, but they alone won’t be able to help you when it comes to tax cases that may be filed against your company if you mess up. So, if you are doubting whether you need to hire one or not, let me elaborate on the things these tax lawyers can help you with.
- They can help you prepare for tax audits and can represent you in court shall it be necessary. A tax audit happens when your return output is a bit out of the ordinary or if the BIR finds something questionable about your report hence, an audit seems to be necessary. We can all agree that prevention will always be better than cure and, in this case, prevention is very imperative. A reliable accounting team and a tax lawyer working together to make sure your reports are accurate can prevent a suspicious report. Nevertheless, if an audit shall still be requested, the BIR may evaluate your financial reports like income statements, bank accounts, credit histories, receipts, and expenses to assess the legality and authenticity of the information your company has provided. Tax lawyers can and will get you covered during this time, and even if things get worse such as receiving a lawsuit.
- Tax lawyers can save you money. Yes, you read it right. Tax lawyers can actually save you thousands of bucks in different ways. Let me give you a few examples. Example number 1, let’s say you are planning to buy and/or sell a business, tax lawyers can help by giving legal and sound advice on certain subjects such as capital gains and devaluation so you can minimize your tax liabilities. Another instance is when you are starting a business; these attorneys can help you choose the entity type and determine your possible tax results. Example number 3 would be if you own (or thinking of owning) business out of the country; tax lawyers are able to inform you of any exemptions which can then help you avoid paying any additional taxes. All these methods used in minimizing your taxes the legal way is called tax avoidance. Tax avoidance is the application of constitutional methods to adjust the financial situation of an individual or business/company in order to lower the amount of income tax they would owe. This can be taken care of by skilled tax lawyers as declaring the allowable deductions and credits can only do it.
- They can help you avoid tax evasion cases. This case is very popular in the country as many famous people (actors and actresses, businessmen, etc.) have been sued with this case. Tax evasion is an illegal activity wherein an individual or entity purposely avoids paying their true tax obligation such as the illegal nonpayment and illegal underpayment of taxes. The thin line between tax evasion and tax avoidance is that one is legal and the other is not. Tax lawyers can avoid these illegal activities and will defend you in court if they would have t.
It’s important to know that finding a tax lawyer in the Philippines is not a difficult thing to do and hiring one would be very important for your business. A tax lawyer is an asset more than a liability and is a must if you are taking your business seriously.