The taxation process and the Right Expenses

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The tax system tends to be complex in most cases. For this reason, it is essential to pay attention to the particularities of each sector, as well as its services or products. One of those cases that require extra care is the taxation of outsourced services.

Recently, we have undergone important changes in legislation, allowing organizations to outsource various services that should have been performed internally. If, on the one hand, companies have more possibilities, on the other, they also need to find out how to do this taxation in the right way. Given the context presented, we prepared this article with the objective of helping your business to keep up with the Revenue, avoiding losses or negative consequences.

What changes, in fact, in the legislation regarding the taxation of outsourced services?

This paved the way for companies to hire contract workers for activities-end. In other words, the main functions of an organization. Thus, the trend is that more and more services are outsourced.

If an organization uses the non-cumulative contribution calculation system and decides to outsource labor, it has the opportunity to accumulate Social Integration Program and Social Security Financing Contribution credits with the company’s payment that outsources.

In contrast, the law now limits before the new regulation, the amount reached 9.25% for contractors under the real profit regime. In other words, some companies are experiencing an increase in taxation in practice. For calculating such expenses and taxes the use of the sales tax calculator zip code is important.

Variable expenses or costs

These types of expenses are related to the activity in which the company is engaged, so that the behavior of variable expenses is determined by the activity that is directly related to the level of production. The expenses it includes are: raw materials, piece rate salaries, commissions on sales, freight, etc.

Example: if there is a 10% increase in production volume, a 10% increase in variable costs and expenses will be related. The tax will be related to that

Expenses or fixed costs

This type of expenses, as its name reveals, are fixed expenses that the company has, even without having a production involved, that is, they are payments that it is obliged to make   during the company’s stay in the market.

For example: If we are renting a commercial premises to carry out the sale of products or services, a monthly payment, water and electricity services, among others, will necessarily be paid for the place.

Expenses or marginal costs

  • Citing the concept of Walter Nicholson, in his book Microeconomic Theory, Basic Principles and applications: “the marginal expenditure associated with any factor is the increase in the total costs of the factor resulting from hiring one more unit.”

For example: If the company produces one more unit than the usual quantity, the costs of raw materials and supplies used for the production of the same will be included. You will need to calculate the tax accordingly.