Listen to this articleTax compliance services have come as a savior for everyone distantly involved in accounting and financial operations. Such services weren’t always very popular and have only become common in the last few decades.
Factors like an increasingly globalized landscape, sophisticated international taxation system, and varying country and regional tax rates have made taxation very challenging for businesses.
This is why businesses find it hard to carry out taxation in-house and ensure compliance.
Due to the complicated nature of international tax laws and changing local tax regulations, accurate tax reporting has become quite difficult.
Moreover, it was not possible to conduct high-quality tax research with the help of the tools and expertise the businesses have at their disposal.
This led to issues like inaccuracy in tax reports, incompliance, inadequate tax research, high tax costs, etc. However, the tax compliance services rapidly grew to address this issue.
Today, firms offering international tax compliance and advisory services cater to the requirements of businesses around the USA and the world.
What is the Meaning of Tax Compliance?
Before we start exploring what tax compliance services do, let us get to know what tax compliance is.
Tax compliance is the process of abiding by the tax laws and regulations of the country when it comes to declaring income, filing tax returns and financial documents, and paying the tax bill.
An important question that may arise here is whether compliance with these regulations is mandatory or are they more like guidelines that should be followed.
Notably, many acts of the tax code need statutory compliance, such as the Income Tax Act, Service Tax, and Companies Act. Therefore, one must understand tax regulations and guidelines to ensure tax compliance.
What is Tax Compliance Software?
Advancements in financial technology have given birth to tax compliance software like Avalara. Such software is automated and updated with the most recent tax laws and regulations. Therefore, users can rely on tax compliance software to a significant extent.
However, operating and utilizing the tax compliance software to its true potential and ensuring high-grade results do require those skill sets.
Here are some popular tax preparation software you can use to ensure compliance.
- Vertex
- ADP Smart Compliance
- Avalara
- Tipalti
What are Tax Advisory and Compliance Services?
The tax advisory and compliance services allow the business to ensure compliance with international, federal, and state tax regulations.
These consider complex rules and policies, regulatory guidelines, and advancements in technology. Such firms assist small businesses and large enterprises with tax accounting, documentation, and compliance.
Most of the time, tax compliance services include other services under the umbrella of accounting and finance to simplify tax accounting, preparation, and filing.
Features of Modern Tax Compliance Solutions
Modern tax compliance services have revolutionized the way businesses approach and carry out tax preparation. It is very different than the traditional way of preparing tax returns and ensuring compliance.
Let us look at the salient features of modern tax compliance solutions.
1. All-in-one Solutions
Modern tax compliance services offer all-in-one tax solutions, including in-depth tax research, tax preparation and filing, financial audit, tax accounting, and tax advisory services. This provides an efficient method to carry out taxes in a quality, rich, and compliant manner.
2. Expertise of a Team
When conducting and preparing taxes in-house, small businesses and self-employed individuals take the help of a tax expert whose knowledge and skillset are limited.
However, tax compliance services are equipped with an extensive team of experienced professionals and led by knowledgeable managers. This allows them to provide high-quality tax services to small businesses.
3. Advanced Financial Technology
Although the advancements in financial technology in the last few decades have been outstanding, most small businesses and self-employed individuals don’t have access to it.
Purchasing the software, setting up the infrastructure required for the high-end technology and training the employees can prove very expensive. This is why businesses and self-employed professionals find it feasible to delegate to tax professionals.
However, automated tax compliance solutions allow businesses to benefit from advanced financial technology at an affordable rate.
4. High-Grade Taxation
Systematic business taxation supported by high-end financial technology and the expertise of seasoned professionals is bound to elevate the quality of end results.
Therefore, tax compliance services allow businesses to conduct high-quality tax preparation at similar costs.
5. Evolve with Changes
The global tax landscape is forever changing. Every financial quarter or year, many countries have significant revisions in their tax regulations and laws. This affects local markets as well as markets located in distant areas in this globally knit economy.
As the changes are frequent and many, it becomes difficult to keep track of these changes. Often, businesses have to deal with the consequences of incompliance, such as penalties and even litigations.
However, modern tax compliance services stay updated with these changes, and therefore, the clients (businesses and self-employed individuals) do not have to keep track of these changes.
Moreover, businesses and self-employed individuals can look up to tax compliance services and count on them to learn what changes in the tax regulations.
Different Types of Tax Compliance Services
Tax compliance solutions vary depending on the context and specific requirements. Take a look at the different categories of tax compliance services that businesses require in today’s industry.
● Sales and Use Tax Compliance
○ Sales and Use Tax
○ Rental Lease Tax
○ Miscellaneous Taxes
○ Registration Services
● Fuels and Excise Tax Compliance
○ Fuels and Excise Tax
○ Severance Tax
○ Related Fuels Tax Consulting
○ Registration Services
● Hospitality Tax Compliance
○ Hotel Occupancy Tax (HOT)
○ Food and Beverage Tax
○ HOT Registration Services
● Business License Tax Compliance
○ Renewals
○ Applications
○ Gap Analysis
● Vape Tax Compliance
○ Prevent All Cigarette Trafficking (PACT) Returns
Major Tax Advisory and Compliance Services
The tax and finance solutions help businesses manage risks, analyze financial data, and promote innovation and growth. In this section, we will brief you on the major tax advisory and compliance services a business might need. These services help you prepare accurate tax returns, ensure regulatory compliance and reduce business expenses with the help of tax deduction optimization.
1. Sales Tax Returns
Modern tax compliance services allow businesses to automate the sales tax and calculate GST and VAT in a single step. Thus, businesses can easily and accurately calculate taxes and ensure compliance.
2. Corporate and Commercial Law
The businesses want to grow in their local market and beyond national boundaries. Therefore, they require knowledge of international tax laws and regulatory risks and learn how to mitigate them.
The tax compliance services support businesses when it comes to corporate and commercial laws and help them bridge cultural differences.
3. Indirect Tax Compliance
The businesses are required to report and file indirect taxes, which can prove very complicated due to changing tax laws and accounting standards.
However, tax compliance services utilize data, technology, and automation for effortless, faster, and accurate taxation,
4. Transfer Pricing Compliance and Documentation
Modern tax compliance services give huge significance to transfer pricing compliance and documentation. These services include key aspects like compliance, defense and dispute resolution, and advancing pricing agreements.
5. Labor and Employment Laws
The labor laws and codes define and regulate the relationship between entities such as the employer, employee, government, and trade unions.
Businesses must consider these laws and legal codes to support a tripartite relationship between employees, employers, and unions.
The tax compliance services help businesses comply with labor laws and codes and advise them on complex labor and employment laws across different regions.
6. International Tax
Global taxation is perhaps the most difficult and challenging part of the financial operations of an organization.
his constitutes calculating taxes according to the regional tax rates, including customs duties and other additional charges, keeping a consideration for the local and international tax regulations.
Moreover, international taxpayers must pay income tax on foreign income whether they reside in the US or are US resident aliens.
7. Sustainability Tax Services
ESG (environmental, social, and governance) considerations define and impact the business decision-making process. This has given way to sustainability taxes, which promote sustainable ways of doing business.
Sustainability tax services help businesses benefit from proficiency in these ESG considerations and tax incentives and help them utilize opportunities to experience growth in profitability and reputation.
8. Excise Taxes
Excise taxes are a kind of indirect tax and are usually applied to specific goods, services, and activities. A business must pay excise taxes if it has the role of an importer, manufacturer, retailer, or consumer in the global supply chain.
The tax compliance services help businesses manage excise and other indirect taxes and advise them on local and international tax affairs.
9. Property Tax
The property tax is an ad valorem tax, meaning it is calculated in proportion to the market value of the property. The authority governing the area of the jurisdiction where the property is located levies the property tax.
The tax compliance services help businesses calculate, file, and manage property taxes effortlessly.
Final Words
The above guide must get you started on modern tax compliance services and what they offer. However, it can be challenging to find a reliable service provider in a myriad of tax accounting solutions.
To address this, we offer a free trial of our rich-quality tax accounting and compliance services. This allows your business to experience our services without paying a dollar for it.
You can continue working with us if you find our services fit your business. To consult our accountant on it, Dial +1(800) 580-5375!