Understanding, Principles and 5 Benefits of Tax Accounting

Posted by Imam Larh on Friday, 16 March 2018

Everyone agrees that accounting is one of the most important fields of science is not it? Accounting that we know is not only the activity of recording corporate transactions only, accounting has more coverage than that, accounting can also be said financial language that can be communicated to users accounting reports that the information is used as a decision-making appropriately.

Understanding Tax Accounting

Tax Accounting is simply interpreted as an accounting system that handles, calculates, records and analyzes as well as making taxation strategies related to the event of the company's economic transactions.

Tax accounting is the accounting associated with the calculation of taxation that refers to taxation laws and the rules of implementation.

Principles - Tax Accounting Principles
In its implementation Accounting taxation has the following principles:

1. Unity of Accounting

An enterprise / economic entity is an inseparable unity of the parties concerned with the company's resources

2. Principle of Sustainability


This principle assumes that a company will not be dissolved and will continue its economic activity continuously for an unspecified time.

3. Objective Exchange Rates

Every transaction / economic event is expressed in units of money. And the requirements are:
  1. Can be tested by the auditor (independent)
  2. Not affected by a special relationship
  3. No transfer pricing
  4. No price markup and more
4. Consistency
In accordance with this principle is the method of bookkeeping on an entity should not be changed in a short period of time, if there is a change of method it must be accompanied by reasons, such as in determining the book year, the method of depreciation, the recognition of the value of the currency and the method of calculating inventories of other goods

Benefits of Taxation Accounting

1. Making tax planning and strategy
By using tax accounting we can strategize in terms of taxation, for example about how we set up funds to pay taxes, on how we can pay taxes after discounts so that large taxes can be minimized, so companies do not have to worried about taxes.

2. Present analysis and predictions about the potential corporate taxes in the future.
Through tax accounting, we can predict the amount of tax we have to pay. So we are able to prepare it early and at the time of payment we have no difficulty in paying our taxes.

3. Able to apply accounting treatment or behavior to tax incident.

With the existence of tax accounting, the company is expected to apply accounting practices well on tax issues, which include assessment / calculation, recording, recognition of taxes, and can present in it both commercial and fiscal reports on a company.

4. As an evaluation material
The preparation of tax accounting is ultimately used as an archive or documentation that can be opened and studied at any time. With the aim of comparing with the following years, if there is progress can be continued and maintained and if there is a kemrosoton can be immediately found the right solution. This is a form of evaluation of tax accounting.

5. Increase tax awareness for taxpayers
The presence of tax accounting is to provide ease of calculation and real for taxpayers. Tax accounting also serves to awaken taxpayers to accomplish. paying his tax liabilities with his own conscience.

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