THE IMPORTANCE OF THE TAX BURDEN FOR BUSINESS

 Today's topic of the article will be devoted to such a concept as: "Tax burden and its significance for the company." First of all, it should be noted that this term has a dual nature: a purely scientific category and an indicator on which depends a number of actions that are important for the company (eg tax burden affects the registration / suspension of value added tax invoice).

 The tax burden is an indicator that shows the level of taxes paid by the entity to different budgets, relative to its income (turnover). In addition, the tax burden serves as a driving force for the implementation of plans and inspections of business by regulatory authorities (including the State Tax Service). For business, the tax burden, if properly analyzed, is an indicator of the establishment of excess pressure and excess of "reasonable" budget allocations and can be the basis for auditing and optimizing financial performance.

 The indicator of the tax burden on the enterprise, taking into account the type of activity of such an entity, may indicate the effective or, conversely, the improper operation of the legal department. Yes, there are a number of provisions (benefits) that may not be used by the company and that will lead to an excessive tax burden. For example, the tax base, or part of it, by virtue of the Tax Code of Ukraine or other regulations, may be reduced to the non-taxable part of the tax base. This will directly affect the amount of tax liability to be paid. Thus, exceeding the income limit of seven million hryvnias during the year by an enterprise in the 3rd group of the simplified taxation system will be a consequence of taxation of the excess tax in the amount of 15%. This factor will greatly increase the tax burden. The occurrence of such a situation will indicate the inefficiency of the legal department (department or individual lawyer), as there are legal opportunities to move to another system of taxation (general), which will be more profitable.

 If you refer to the Resolution of the Cabinet of Ministers of Ukraine of December 11, 2019 № 1165, you can determine that the tax burden (more precisely, its size) is the basis for suspending the registration of the tax invoice.

 According to the above-mentioned resolution, the tax invoice is subject to unconditional registration if the tax burden exceeds 0.05, ie 5%. In this case, the tax burden is calculated by the formula: D = S / T (indicator S is the amount of taxes paid in the last 12 months (includes the amount of the single social contribution and taxes and fees levied by the State Tax Service; indicator T is the total amount of goods or services) in the customs territory of Ukraine).

 Note that the registration of a tax invoice is an important element of the business entity, because otherwise, its work is actually paralyzed.

 In order to determine the right system of taxation for your business, optimize existing costs and deductions, choose a reliable and professional legal partner - the law firm "Prikhodko and Partners", we will provide you with competent legal assistance.