Corporate Taxation Tasks And Responsibilities

When you set up a company, you must inform the Tax Authority if it is subject to Corporation tax, pay any due tax expenses and file company tax returns. Most of the types of companies and organizations such as corporations, cooperatives, sole traders, members' clubs, limited liability companies and partnerships, are liable to Corporate taxes and therefore to the respective timeframes and requirements. Besides these, the local branches of multi-national corporations are also subject to Corporation tax.

Corporation tax requirements are separate and different from the company setup requirements. Company setup requirements are typically set by Commerce Chambers or some equivalent party, while Corporation tax specifications are set by the Tax Authority. Furthermore, regarding Corporation taxation, different requirements and specs apply in the case of an active company or an inactive one. Active are the companies which operate, engage in trading, produce and generate income while inactive are the ones that do not meet the aforementioned standards; either or all of them.

A Limited Liability company or Ltd as it is called, is a common way of doing business. It has similar requirements with Societies Anonyme (SA) in the setup process but it usually requires a smaller startup capital. In addition, although some procedures are the same with Corporations, Ltd is not recognized as a corporate company format in several countries. In spite of, Ltd companies are considered legal entities that do not bind their shareholders, members, partners or managers personally for Company obligations, unless otherwise stated by a court. Conversely, sole traders, partnerships, members' clubs and other forms of non Incorporated companies bind their shareholders and partners' personal assets and they are personally liable for their businesses' obligations as well.

Regarding Company taxation, both Ltd and SA are chargeable to tax, with similar processes and specifications. Once the company is setup, it needs to be registered in the Tax Authority so that it obtains a Tax Identification Number and thereafter pay Corporation taxes and submit Corporation tax returns within specified time limits. Corporation taxes include Pay As You Earn (PAYE) taxes and Value Added Taxes (VAT) as well. The good thing is that all these processes and payments can be done online since almost all countries have adopted advanced governmental electronic systems and operate in such ways in order to facilitate these procedures for the companies.

Besides the ease and convenience of the online electronic systems, there is also the option of outsourcing the Corporation tax duties along with all other accounting tasks to a tax adviser or an accountant. Most of the companies embrace this solution as it is both efficient and effective. They partner with an authorized adviser and they let him act on the company's behalf for tax and accounting related issues. Of course in such cases, the Tax Authority should be formally informed so that all the necessary and required activities are completed in line and on time as well.

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