Today the telecommunication industry is going through rapid changes. With advancements in technology like the Internet of Things and 5G, telecom is undergoing various changes. In most cases, with the introduction of new technology, the tax policy is affected, so it is important that you ensure a telecom tax compliance strategy that is related to sales, income and property.
Proper telecom tax compliance is beneficial for both your company and your team. Following are some tips for telecom tax compliance you can use for managing your obligations and maximize tax savings.
- Developing a Compliance Strategy
Since telecom companies are a part of a deregulated industry, they have some leeway in their tax positions. However, whatever your type of tax return is, you should always have a good compliance strategy.
- If there is a revaluation in a deduction strategy, you should try to take advantage of depreciation, qualified technology equipment etc.
- If you know your company is making a loss this year, you can maximize your net operating losses so as to increase cash flow or reduce future expenses.
Hence do know what you are trying to achieve and accordingly adjust your compliance strategies.
- Documenting Compliance Practices
Proper tax compliance is really beneficial as it is important to document your current process and helps you to think about how you can take advantage of tax automation. By using proper telecom tax compliance, you will be able to benefit from more efficient and improved outcomes and change your strategies accordingly. Try to categorize your revenue so that you can process it later on. Try to see how the transactions are processed, how the information is collected and how it can be summarized. Also, it is important that you keep up with the changes in the regulations according to your tax jurisdiction as the telecom industry is rapidly changing, and so are the regulations. Such compliant strategies are really beneficial.
- Understanding the complex arrangement
Telecom tax is a lot different than sales and uses tax as there are physical facilities, equipment and products to track; however, in a telecom, tax compliance has to be ensured regarding invisible radio waves and digital signals. So, you have to understand this setup really well so that you can ensure better tax compliance.
- Management of Bundling Complexities
Telecom tax compliance requires research, validation and updating tax rates across various states. Hence you have to maintain proper usage records so as to explain and justify the unbundling methods to the auditor.
- Ensuring the Requirements for Billing
Apart from properly identifying customer locations, there are various billing requirements that are required to ensure compliance. So you have to check that the specific elements are mentioned on the customer bill. Now, this can vary according to your tax jurisdiction and the type of service you are providing. However, it is important that you provide a specialized billing platform so that you improve your accuracy.
These are some strategies you can use to ensure better telecom tax compliance.