Basic steps for income tax

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BASIC STEPS FOR INCOME TAX

! KEY STEPS TO DEVELOPING THE 2017 INCOME TAX RETURN!

Making a income tax return is a wasteful work that requires accounting knowledge and tax rules. This year, your team will be tested because the IFRS will be the basis of the income statement, i.e. the accounting policy is fundamental and having a control of the differences will be decisive by the fiscal conciliation report.

It should be noted that in addition there is a tax transaction regime that will generate the need for better control, is a complex task, so we invite you to advise properly in the revision or elaboration of the same and consider these basic steps:

1. CONSIDER CURRENT REGULATIONS:

It is necessary to bear in mind that the accounting frameworks in force are the basis of the income tax in accordance with article 21-1 of the E.T.

In other words, it will be necessary to keep in mind that the tax book does not exist and it is decisive to revise to which group belongs the company (group 1, 2 or 3) and to request the accounting policies.

2. UNDERSTAND THE COMPANY’S SOCIAL PURPOSE.

If the company is known in detail, this will help to understand if a cost or expense is not coming, which is where the tax authority focuses and 70% of the processes before the contentious administrative jurisdiction seek to ignore them.

3. UNDERSTAND WHAT THE ACCRUAL MEANT.

The recognition of income, costs and expenses has been substantially altered and it is necessary to revise which were the main effects.

Group 1. Paragraphs 27 and 28 DUR 2420/2015 Annex 1. When the accrual accounting basis is used, an entity shall recognize items such as assets, liabilities, equity, income or expenditure, where the definitions and recognition criteria envisaged for such elements are satisfied in the framework Conceptual.

Group 2. Paragraph 2.36 DUR 2420/2015 Annex 2 and 2.1. In accordance with the accounting basis for accumulation, the items shall be recognized as assets, liabilities, equity, income or expenditure, when they satisfy the definitions and criteria for recognition of these items.

Group 3. Paragraph 2.37 DUR 2420/2015 Annex 3. The effects of transactions and other events are recognized when they occur and not when money or other cash equivalents are received or paid in the periods with which they relate.

4. ANALYZE THE OPERATING FLOWCHART:

Knowing the company is necessary but understanding how it operates day by day and is known as it develops its activity, will allow you to understand if there is causal relationship of costs and expenses with the activity producing income.

5. PERFORM A REVIEW OF THE MAIN POINTS:

It will be necessary to make a comparison with the previous year and look at the main differences and understand their justification. In addition, it is pertinent to understand that if fiscal conciliation is to be made, it cannot contain errors or differences, as it is evidence of an audit.

IN THE YEARS 2013 AND 2014 IT CAN BE COMPENSATE EXCESSES OF PRESUMPTIVE INCOME IN THE EQUALITY TAX (CREE)

The presumed minimum base surplus incurred by taxpayers of income tax for equity – CREE, may be compensated for taxable years 2013 and 2014.

The Constitutional Court found that it is not reasonable or proportional to exclude the compensation for losses of presumed minimum base excess to define the taxable base believed in periods 2013 and 2014.

The possibility of making the compensation of excess of minimum base referred to in article 14 of the L. 1739 of 2014, only from the taxable year 2015, excluding the periods 2013 and 2014, generates an excessive tax burden that does not know the reality of each subject, since it would appear delinked from the supposed payment capacity established in the standard.

Based on the foregoing, the Constitutional Court ruled to declare the legality of the arts. 22 L. 1607 of 2012 and 14 L. 1739 of 2014, on the understanding that the excess of the presumed minimum base incurred by the taxpayers of the CREE may be compensated for the taxable years 2013 and 2014, in the terms provided for in the motive part of this Providence.

Communication No. 9 of March 7, 2018/ Document / Click

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