Tax planning in the family business, as in any other company or professional, is key to the viability of the business.
As Lola Ferrer, our Partner and General Manager, explains in a recent interview by Cope, a good tax planning not only adds value. It also allows to optimize the available resources. It facilitates the obtaining of financing, based on the needs of this, and therefore of the viability of the project.
Tax planning in the family business due to its peculiarity
In the specific case of the family business, there is also the family factor. The family itself is the owner of the company in which emotions are often mixed, which are not always easy to manage. Common or different interests, but which can even be divergent. And in this way, the lack of a clear separation between company and family generates tensions and even the non-viability of the business project.
For this reason there is the fiscal regime of the family business, which as we have already commented in previous articles, does not consist of fiscal benefits for the own activity of the company. But it is materialized in tax benefits for the self-employed who carry out the same one or for the partners of the family business. That is to say, for the family.
But we are in a scenario in which the threat of tax increases is becoming a reality. Very specially, Inheritance and Donations and also Patrimony. Taxes in which tax benefits exist today in the scope of this regime of the family business.
Because the succession of a business generation and safeguarding the family patrimony, has to be done well, in order not to damage the viability of the business project.
How these increases may or may not affect this regime is still unknown. But our recommendation is to anticipate and leave the family “homework” well done. Especially in the Autonomous Communities where there are tax rebates on these taxes, headed by Madrid.
And what about new entrepreneurs
In times of pandemic, of crisis as a concept of our daily life, entrepreneurship in general is more difficult. But that does not mean that there are no business opportunities.
In most cases, they are closely linked to specific sectors and where the technological component is key.
We are not referring to sectors such as health, education and finance. Sectors in which technology is allowing access and commercialization, which would otherwise be very limited by mobility restrictions, if not impossible.
And like any new project, in addition to the idea, planning is needed. Planning of the business project itself and, therefore, being able to write its immediate future:
- Formal compliance. That is, the legal obligations to carry out the project.
- Tax planning. To be able to take advantage of all existing tax benefits, which facilitate cash flow and therefore business viability.
- Financial planning. To see what resources are going to be necessary in the short and medium term, and how to obtain them. To be able to think in the long term.
And it is here where fiscal planning is key. Because it is a way to take advantage of the financial resources that one is generating.
Therefore, let’s remember that taxation, especially for companies, SMEs, let alone self-employed professionals, is subject to legislative changes. And these changes generate a continuous need for monitoring and action. Not only in prevention, but also in the optimization of tax advantages.