Tax misconceptions that can cost the business a lot
There are many misconceptions circulating about taxation. These misunderstandings can be particularly dangerous because they often persist for years before it becomes clear how much they have cost the business. Let’s look at the most common tax myths!
“There’s no need to change a proven strategy”
Many business owners believe that if a method worked this year, it’s worth relying on it next year too. The reality, however, is that tax laws are constantly changing—just like the company itself. The changes in the KATA rules are a good example: those who didn’t follow the modifications carefully ended up with additional tax obligations.
Moreover, the tax authority’s (NAV) auditing practice is continuously evolving. They use increasingly sophisticated methods to uncover non-compliant practices, meaning something that once worked smoothly can easily become a problem later on.
“The accountant will handle everything”
Tax optimization is not automatically part of a traditional accountant’s duties. This misconception often results in many entrepreneurs missing out on potential savings.
Tax optimization requires deeper analysis and strategic planning. It needs a proactive approach that, based on future business plans, establishes the most appropriate tax structure. All this demands specialized tax advisory expertise.
“Tax optimization equals tax evasion”
Many people confuse tax optimization with tax evasion, yet there’s a huge difference between the two — and this misconception prevents many from taking advantage of completely legal tax-saving opportunities.
Tax evasion means deliberately breaking the law. In contrast, tax optimization is tax planning within the legal framework, during which the business takes advantage of the opportunities and extra benefits provided by regulations. It is always a transparent, documented, and lawful process.
“Every possible opportunity should be used”
A common mistake among entrepreneurs is the desire to apply every available tax-saving method without examining their long-term impact or risks. This approach often backfires.
Not all tax optimization options are suitable for every business. Their effectiveness depends on the company’s size, field of activity, future plans, and many other factors. In some cases, the administrative burdens and costs of a chosen method can outweigh the potential savings.
“Tax optimization only benefits large companies”
Many small business owners think that tax optimization is only worthwhile for big corporations — but this is far from true. In fact, smaller companies often achieve proportionally greater savings.
There are numerous specific tax benefits and optimization opportunities available for small businesses, and taking advantage of them can provide a significant competitive edge. The key is to find the solutions that best fit the company’s size and profile.
How can you avoid these pitfalls?
The most reliable way to avoid these misconceptions is to seek professional tax advisory services. An expert keeps up to date with ever-changing legislation and can accurately assess the true impact and risks of each optimization opportunity.
Tax consulting for businesses essentially means a professional consultation in which the company’s unique characteristics, future plans, and specific needs are analyzed. Based on this information, a tailored strategy can be created to maximize savings.
Don’t let misconceptions limit your company’s growth — instead, choose tax consulting in Budapest and get in touch with us!
