The ordinary fiscal year closes on December 31, 2023, so it is a good time to pause on the day-to-day and analyze if as a company you are ready to close, if you have considered all the elements that must be taken into account, or if rather these last days, it is time to make accounting adjustments allowed by the Law.

To begin with, it is important to be clear that, to prepare an income tax return, it is not only necessary to classify the accounting in the respective boxes of the CIT form, but also to carry out the tax reconciliation, a step that many companies still do not perform. This is the mechanism for not recognizing the income and expenses that do not apply, or to include some that are not in the accounting, but it could be considered for tax purposes. If you do not make such tax reconciliation, then you would probably be declaring in most cases, expenses that were recorded in the accounting, but that they did not necessarily have the right to be deducted, thus generating tax contingencies.

Among the expenses to be disclosed are those that do not have reliable supporting documentation, those that are not necessary to generate income, those to which the correct withholdings were not applied, among many others that must be analyzed according to the industry in which they belong.

As we are in the last days of the fiscal period, it is now when it is worth reviewing how the company is doing in terms of transfer pricing, since the ideal is that any adjustment be reflected within the fiscal period, hence the recommendation to carry out the preliminary Transfer Pricing study. It is also a good time to check with suppliers if there is anything pending to be invoiced, so that the respective invoices can be received within the current period.

Each industry has its particularities, for example we can mention the manufacturing companies belonging to the Free Trade Zone Regime, which it is time to review if they reinvested profits in training or in fixed assets, since this generates tax credits, something that many companies today are unaware of, or it should be reviewed if given the financing structure of companies in general,  whether they would have a limitation of interests that can be recognized, among many other aspects.

Given the above, it is important to seek the advice of specialists with integrated knowledge, which allows them not only to identify any element that has a tax impact, but also to recommend actions to be more efficient from a tax perspective, always under the protection of the Law.

The content of this newsletter is merely informative, that´s why it cannot be used under any circumstances as advice on the matter described in it. If you need advice on any of the aspects discussed, our team of professionals will be willing to assist you. contacto@jadelrio.com