Tax is not always a focus of working capital projects, although it is often one of the largest items on an income statement. However, tax can offer a variety of alternative strategies to preserve, gain or maximize cash to support business goals.
Major areas of benefit for tax cash advantage
Control of assets
EY's Quantitative Services (QS) teams review all the significant expenditures which were capitalized on fixed assets but having the possibility of direct expensing. Capitalization vs. expensing, accelerated depreciation, asset identification/classification, cost segregation are some of the examples.
Tax authorities are becoming more demanding and non-compliance penalties are increasingly harsh. Companies must ensure that their operating-expense analysis is technically correct and deductions are claimed when due. Tax legislation is complicated, hard to understand and different applications for the same subjects at different levels may be faced. Non-deductible expenses accounts are good sources of opportunities for deduction possibilities due to the different interpretation and understanding of tax law.
Accounting and inventory valuation
We identify areas where tax legislation gives you opportunity or requires a tax position different to that shown in financial statements.
Our professionals share a deep understanding of tax rules and accounting methods and the options that companies face. In addition to the ability to deal with volumes of data, our teams help you to understand relevant tax rules and what they mean for your business.
Advisory on incentive regimes
Tax incentive programs offer opportunities to companies to increase their investments in certain areas such as innovation, new facilities, employment and exportation. EY's QS teams review companies all activities, identify available incentives with Investment Opportunity Check (IOC) application and provide advisory on utilizing benefits and maximizing incentives.
Our QS team looks for plenty of other opportunities for cash tax savings such as location specific opportunities and industry specific opportunities. EY's giving importance to specialization to industries makes us watch for the benefits.
Quantitative Services Engagement Partner: Serdar Altay
Contact: +90 212 408 51 30