How to reduce your company’s IRC?

The tax burden is a constant concern for entrepreneurs, and Corporate Income Tax (CIT) represents a significant portion of this burden. However, there are legitimate strategies that can help reduce the amount of corporate income tax payable.

In this article, we will explore some of these strategies to help your company optimize its tax situation.

• Tax Benefits: Portugal offers several tax benefits to encourage specific business activities. Investing in research and development, for example, can qualify your company for tax deductions. It is important to be aware of updates to the Investment Tax Code to take advantage of these incentives.

• Tax Losses: If your company had losses in previous years, it is possible that you can deduct them from the taxable income of future years. This is a way to ease the tax burden in periods of greater financial success.

• Reinvestment of Profits: The reinvestment of profits for the benefit of the company itself can also reduce the IRC. Investments in tangible fixed assets or equity may be eligible for tax reductions.

• Tax Planning: Careful and strategic tax planning is essential. The choice of the legal form of the company/company, the location of the head office and the management of expenses and revenues can influence the amount of corporate income tax payable.

• Special Regimes: There are special regimes, such as the Simplified Taxation Regime, which can be more advantageous for small companies, depending on the turnover and type of activity.

• Professional Consulting: Finally, consulting from an accounting professional or a tax expert can be an investment that translates into savings. These professionals can help identify opportunities and strategies specific to your company’s reality.

Remember, tax optimization must always be done legally and transparently. Utilizing dubious or illegal strategies can result in serious consequences, including fines and damage to the company’s reputation.

By implementing these strategies, your company can not only reduce the amount of corporate income tax payable, but also strengthen its long-term financial position. Financial literacy is a powerful tool for business success, and smart tax management is a crucial component of that literacy.

ValuingTools has a professional and experienced team that can provide valuable insights to help your company thrive in a complex tax environment. Contact us today for more information. Your company deserves the best possible planning for a bright financial future.