What is tax accounting?

What Does tax accounting Mean

The accounting is a science (as it produces systematic and verifiable knowledge) and technique (allows to process and apply data) that provides useful information for making economic decisions. Its object of study is equity, the analysis of which is reflected in the so-called accounting statements or financial statements .

Fiscal (from the Latin fiscalis ), on the other hand, is what belongs to or relative to the treasury. This term is linked to the public treasury or to the set of public bodies in charge of collecting taxes.

It is known as tax accounting to the information system related to tax obligations . This type of accounting is based on the tax regulations established by the law of each country and includes the registration of operations for the presentation of returns and the payment of taxes .
Tax accounting can differ from financial accounting (which records the activity and transactions of a company in a given period). In some countries, accounting laws require reporting every twelve months, leading to the birth of the fiscal year .
If the reports are due on July 1 , the fiscal year will run between that day and the following June 30 . This difference with the usual calendar means that there are different types of accounting information in a company. For example, a company may have earned $ 1 million in 2007 from its operations , but lost $ 2 million in the fiscal year that began on the same date.
It is worth mentioning that this information system known as tax accounting has a direct relationship with tax regulations, which is why it is potentially different in each country, according to current legislation. Regardless of these differences, knowing tax accounting is extremely important for any company or individual entrepreneur.
The tax payment obligations that every company has, whether it is formed by one or a hundred people, are periodic and immovable and, although the most common is that all the procedures related to them are delegated to a manager or advisor, the The success of any business depends to a large extent on the awareness that managers have of this matter, both of the obligations and of tax rights.

When the liability that a company has before third parties is unlimited, the importance of knowing its tax accounting is even greater, since a poor management of it could affect its assets.
Tax accounting in different countries
* Spain : The Tax Agency is in charge of collecting taxes related to business and professional activity. The rest of the cases are usually handled by the City Council of the town in which the company is based;
* Chile : Tax collection is carried out through the Internal Revenue Service . On its website it is possible to get specific information for companies of different sizes;
* Mexico : All matters related to the payment of taxes must be processed through the Tax Administration System , which provides all the necessary data to keep a business in order;
* Argentina : The body in charge of applying, collecting and supervising taxes at the national level, according to current legislation, is the General Tax Directorate, a body that is part of the Federal Administration of Public Revenues ;
* Colombia : The National Tax and Customs Directorate deals with all matters related to taxes and its portal offers information and guides to keep up to date on tax obligations;
* Panama : For all tax issues in the country there is the General Directorate of Income , which depends on the Ministry of Economy and Finance.

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