Smart Way of Filing Your Income & Vat Tax Return

In an article on Starting a small business, I mentioned that registration for Vat and Income Tax with various Tax authorities is a requirement. In this article the focus is on what you need to know before Filing your first Income Tax and Vat tax Return to any of your Tax authorities.

If you successfully file your tax registration forms with the department of taxes, you are under obligation to submit your sales tax or Vat returns and make payments for any taxes due by specified dates. You are also required to maintain sufficient records and retain them for specified minimum period and allow Tax authorities access to your business premises to examine goods and records at any time.

This is a serious obligation, but there is always a smart way of doing things, these are some of the Tips to avoid Tax return problems with the authorities.

1. Take note of the Accounting date. Most Income tax authorities require that accounts are made by the end of a given specific date. This refers to a date on which the accounts are made up for Income tax purposes for example ZRA requires that accounts be made by 31st March.

2. Avoid late submission of returns and non payment of taxes as it may attract penalties and interest for the days a return is late. Carefully take note of the required closing dates of submitting Tax returns following the end of the charge year to avoid penalties for late submission of Tax Returns.

3. Get information about the correct Income tax and Vat rates including the correct procedures of calculating your Taxes to ensure you pay the correct tax amounts. Get details of any annual Tax adjustments in the national Budget. You can get this information from your tax authority.

Preparing your taxes from scratch with a pile of receipts and sales invoices for the whole period and a blank Tax Form on your table can be a frustrating experience. Ultimately, paying a professional Accountant to prepare your Taxes every time you need to prepare Returns can be expensive especially for a small business. But using Accounting software, you can easily build up your daily transactions on a daily basis and simply print a tax report at the end of the period when you need to prepare your Taxes.

In countries such as the US where you can e-file your federal tax returns, the use of free online tax software saves you time. But In countries where you need to download and print the Tax Forms and then complete the Forms manually, i would recommend you get accounting software.

About the Author:

Fixed Asset Consultant at Prosperity Agencies Limited with over 10 years practical experience in physical verification, bar-coding of assets and fixed asset software implementation +260 211 239859

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