The Best Practice Network Guidelines | The Best Practice Network

• Best Practice » Best Practice Software » Compliance Software » Tax Compliance Software » Tax Compliance Software – The Easiest Solution for You Tax Woes

Taxes can be a major hassle for any citizen. There are hundreds of numbers to crunch in and even more receipts to collect and categorize. However, thanks to the introduction of automation into the world of compliance, tax payers can embed best practices into the process by using tax compliance software.

Introducing Tax Software

Tax compliance software is a system that allows tax payers to comply with income tax, corporate tax, VAT, service tax and any another other tax they need to pay on the long run. A good system will take care of the following tasks:

• The calculation of taxes which should be paid to the government
• Tracking transactions that require tax payments
• Storing information about eligible tax credits

Other advanced systems can calculate income or revenue instantly if the user enters pre-defined tax rates and slabs. Such systems will eliminate or at least reduce the chances of human error during the calculation of tax payments.

Types of Tax Compliance Software

Before investing in this software, individuals or companies should be aware of the two types of software available for them to implement the best practices of taxes – direct tax software and indirect tax software.

• Direct Tax Software – Direct tax software deals with direct tax, which is a type of tax that is paid directly to the government. Tax payers who are obligated to pay income tax, corporate tax and transfer tax will require this software
• Indirect Tax Software – This software will work on managing indirect taxes, i.e. taxes that are collected by stores from customers and include sales taxes, value added taxes (VAT) and goods and services tax (GST). Indirect tax software can be more complex which is why having this software enforce the best practices of taxes is important.

Two of the most commonly found tax compliance software in today’s market are VAT compliance software and service tax compliance software. However, these should be customized to match the country or city’s tax rates.

Companies and individuals interested in ensuring their compliance with the country’s taxes finally have the solution in their hands. Thus, the next step is to choose a platform and start abiding by the rules of taxation.

Further reading: Corporate Governance | Audit | Performance Improvement