Tax planning is a strategic approach to managing your NZ business’ financial affairs, with the aim of legally minimizing your tax liability. In other words, you plan ahead to make sure you pay the taxes you should be paying, but not a penny more.

Working with your business adviser, you can look for deductions, credits, exemptions and tax-saving strategies that will help to optimize your company’s overall tax position.

How does tax planning affect your business?

The primary goal of tax planning is to reduce the amount of taxes your NZ business owes. But it’s also about making sure you stay compliant with all the New Zealand tax laws and regulations applicable to your business.

But what are the main advantages? Let’s take a look at five of the big benefits of careful, strategic tax planning.

By planning your tax across the year, you can:

1. Maximize your profits

Strategic tax planning helps your company find the best available tax incentives, deductions and credits. This reduces your overall tax liability, cuts your annual tax costs and increases your overall profitability as a business.

2. Boost your cashflow

Tax planning is a great way to open up more liquid cash and achieve a better cashflow position for the business. When you cut down the company’s tax payments with Inland Revenue, that frees up cash and helps you achieve a positive cashflow position.

3. Stay compliant and mitigate your risk

Being proactive with your tax planning keeps your NZ company compliant with the relevant tax laws and regulations. It’s a sensible way to tick the compliance boxes and reduce the risk of costly penalties and legal issues.

4. Drive your strategic growth

Smart use of tax planning helps you reduce your tax costs and reassign those funds to your strategic business goals. It’s a golden opportunity to invest in areas that promote long-term growth and competitiveness.

5. Give your business a competitive edge

If managed well, efficient tax planning leads to lower operational costs for the business. This gives you a competitive edge when it comes to pricing, innovation, sales and revenue generation.

How can we help?

Getting strategic with your tax planning has many advantages for your financial stability as a business. But to maximize your planning, it’s important to work with an experienced adviser.

As your Financial adviser, we’ll help you look ahead across the whole financial year, looking for the opportunities to reduce your tax liability and find the best tax deductions and incentives.

If you’d like to know more about the impact of tax planning, we’ll be happy to explain.

Get in touch to talk about tax planning.

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