There are three types of tax planning: operational, strategic and tactical. In order to know when to adopt each one of them as a strategy and execute it efficiently, it is necessary to have a deep understanding of all sectors of the company, in order to define the objectives and the ways that will be used to achieve them.
Just to remind you, tax planning is a lawful way to reduce the payment of taxes through the activities that the company performs with regard to the collection of these obligations.
Types of tax planning
→ Operational
It is the one that uses procedures prescribed by law within a business, aiming at the fulfillment of tax obligations. This development model complies with current regulations, including tasks such as correct bookkeeping and payment of taxes on time in work routines. The reduction of taxes is generated through the anticipation of their payment.
Operational tax planning is designed for periods of 3 to 6 months. It demonstrates all the means that will be articulated in order to achieve the established objectives. These action plans need to be developed within the projected period.
In this type of planning, the responsibilities of each person involved are specified, as well as the activities, tasks and resources that will be used, creating conditions for achieving the objectives.
Thus, it needs to contain all the necessary means for its implementation, the methodology that will be used, the expected objectives and those responsible for carrying them out.
→ Strategic
In strategic planning, purposes are defined considering the long-term benefits for the company. Its objective is to project the future of the business, and contributes to the definition of the organization’s vision, mission, and values.
This type of planning is usually designed for a period of 5 to 10 years, so it is not very detailed and needs constant revisions so that it does not become obsolete. It must consider internal and external factors to the company for its elaboration, thinking about the best allocation of resources in a way that results in benefits for the business. As they are decisions that imply changes in the characteristics of the company, it is usually made by the owners, presidents and directors.
During strategic planning, the type of tax regime that will be most suitable for the company’s framework is decided. For this, it is necessary to evaluate some issues such as location, capital structure, business branch .
So, when carrying out strategic planning, fundamental questions about the vision (who he is and what he does), the mission (where he is and where he wants to go) and the values (what he values) of the company must be considered, and thus manage to adopt strategic methods to implement the targeted changes.
→ Tactical
Tactical tax planning focuses on the medium term. They are designed for 1 to 3 years, on average. It maintains the global view of the organization used in strategic planning. The difference is that it is aimed directly at the areas and departments of the company. In other words, strategic planning prepares decisions and projections for the company as a whole, and tactics translate these plans and implement them in each sector. Thus, each department seeks to launch objectives in order to guarantee the achievement of the goals proposed by the strategic planning.
It is worth noting that it is tactical planning that makes the connection between Strategic Planning and Operational Planning. Therefore, it is during tactical planning that issues of how the actions will be carried out and the strategies that will be needed in each sector are addressed to achieve the company’s general objectives.
Types of tax planning
As we have seen, tax planning are measures applied in order to reduce, postpone or even eliminate taxes. By opting for the least onerous way of meeting fiscal targets, the company generates profit.
In this way, effective planning provides the reduction or suppression of the tax burden, the postponement of the payment of taxes through the planning of dates that suit the company’s cash and the reduction of the tax base. This tax analysis and management strategy should be used by all types of companies , regardless of size.
A few steps are essential for good planning with John Labunski Dallas
• Data survey
Optimizing a business activity always requires some care and for tax planning this is no different. It is necessary to define all the steps, the variables regarding the economic and tax activities of the company. Thus, other points deserve special attention. Are they:
• Invoicing Forecast (ie gross revenue)
Forecasting a company’s revenue is a fundamental step in tax planning. It is from the projection of billing for a certain period that it is possible to fit into the appropriate taxation regime. This includes looking at the geographic distribution of revenue, total revenue, and location where services were provided.
• Forecast of operating expenses
From the point of view of accounting, operating expenses are all expenses with activities of the administration of a company and with the sale of its products and services. Managers need to differentiate between operating expenses and other expenses, such as production costs.
Thus, tax planning is also prepared based on the forecast of operating expenses, making an estimate of future expenses from the information obtained in the accounting year — a period of one year, in which the result is calculated — previous.
Good management allows you to know the accounting reality of a company and create a budget forecast for the next year.
• Profit margin
Having an idea of how much the company intends to profit is also essential so that the planning can simulate and make comparisons, between the benefits and disadvantages of the tax regimes in force in the country.
• Amount of employee expense
The amount spent on employees is also seen as an accounting expense. With accurate information about these expenses, it is possible to prepare a plan to project expenses for the coming months.
• Scenario simulation
An excellent way to verify which regime is most beneficial for the company is the analysis and simulation of scenarios, so that the advantages and disadvantages of choosing one of the taxation can be evaluated.
The analysis and simulation of scenarios allows the administrator to seek alternatives for less costly tax burdens for the company, reducing costs. In addition, it is necessary to assess the impacts on financial results by choosing a particular model of taxation regime, allowing the establishment of strategies to reduce tax burdens for a future period.
To simulate scenarios, you can use situations such as an optimistic scenario, where the projected environment is favorable for the company, a pessimistic scenario, where every idealized projection is negative for the organization and a realistic scenario, idealized in a critical way. , moderate.
In preparing this analysis, some points should be considered:
# impacts on revenue
(how the use of new features affects consumer buying habits);
# impacts on income and expenses
(how hiring new salespeople can interfere with results);
# impacts on profitability
(cutting or hiring personnel); cash impacts (such as changing payment or receipt terms can generate benefits).
