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Tax optimization for a travel company

TASK

Tax optimization for a company in the field of MICE (corporate tourism). The owner has doubts about the competence of the previous accountant.

SOLUTION

If a company is an intermediary between a tourist and hotels, hostels, restaurants, tours around the country, etc., provides at least 2 services in the field of tourism, then it has the right to a full refund of incoming VAT, up to a simplified withdrawal to the company’s account. For example, your agency concludes an agreement with a tourist group on booking a hotel and transferring from the airport, payment for the hotel and transfer is made by you with VAT, and if you are registered with tax, then when filling out the declaration, this amount will be fully refunded to you. That is, when registering a travel company, it immediately had to register as a VAT payer, accept incoming VAT for offset, and not pay outgoing VAT – officially on the basis of a Government benefit. In fact, in this case, the company lost more than $ 15,000 of unrecovered VAT over two years of activity. Based on the results of the tax report, the business owner adopted the correct tax system and fired the incompetent accountant.

DIFFICULTIES

The client, due to long-term work with an incompetent accountant, formed an erroneous opinion about the procedure for calculating and paying taxes, the company’s lawyers had to prepare a complete summary of legislative acts on issues related to taxation of the tourism sector within 1 working day.

RESULT

Application of tax incentives and significant tax optimization of the business.

 

June 2020

Регистрация бизнеса и бухгалтерское обслуживание в Грузии

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