As a sole trader or company director, it is essential that you optimize your company’s tax situation by using deductions on your taxable income.
Depreciation allows you to reduce your taxes by taking into account the loss in value of some of your assets and investments.
The determination of inventory is a fundamental element in accounting for the preparation of annual accounts. From a tax point of view, a stock is a set of goods held by the company which will be used in the production process to make a profit.
Sometimes, the manager is forced to carry out the annual inventory himself.
The Commercial Code obliges every trader to make an inventory of his company at least once a year(C. com. art. L 123-12) which must be communicated to the tax department during a tax audit.
A provision is a future expense or loss that is not yet effective at the end of the fiscal year. It will nevertheless be deductible from the company’s taxable income.
For a company, deductible expenses are expenses incurred in the production of goods and services that can be deducted from taxable income. On the contrary, other expenses can be added back to the result, so it is important for the manager to identify these expenses.