Innovative And Frugal Ideas For Investment And Payment Of Taxes

Amazon paid no corporate or income tax last year. The company’s profits doubled over the past nine years but the company paid a negligible amount of taxes. Why? Well, Amazon reduces its tax bills precisely because it reinvests those profits into its operations every single year. Under a scenario where Amazon had no corporate tax breaks, it would disincentive the company from reinvesting. Professionals, like Brussels tax specialists, advise firms on how to invest their capital and create value for the economy in other ways than by paying taxes as corporate taxes are the biggest expense for a business which can go as high as 40%.

Here are a few examples of how a firm can invest in itself and reduce their tax bills:

1. Investment in Research & Development: Silicon Valley startup “gThrive” makes wireless sensors that look like plastic rulers — farmers can stick them in different parts of their fields and collect detailed information about soil conditions. The data allows growers to optimize their use of water while improving the quality of their products and yields. It’s a very helpful device in California, which faces major water shortages, and can pay for itself within one year. This type of development can help the company generate profits and receive huge tax credits for such research at the same time.

2. Investment in Property, Plant, and Equipment: Walmart, for instance, is always expanding to new locations and with it comes the requirement to buy land and more inventory to sell. The grocery store depreciates long-term assets for both tax and accounting purposes. Depreciation, which is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value, can help the company deduct the cost of the tangible assets they purchase as business expenses, which eventually allows the grocery store to claim the depreciated amount as a tax return.

3. Employee Stock Compensation: Companies like Amazon are paying its employees in stock, which encourages workers to be productive and helps the corporate claim a tax return when the workers sell their shares.

These are a few ways, the company and the economy both grow, a win-win and thus create greater opportunity for businesses and cities in which it operates. In general, a company contributing to the economy’s growth is provided with incentives, like tax credits.

If you are looking for such frugal and innovative for investment and payment of taxes, you should definitely look out for Brussels Tax specialists. 

If you’d like to become a frugal innovator, the first principle to follow is: keep it simple. Don’t create solutions to impress customers; make them easy to use and widely accessible. Rather than over-engineer complex products in insular R&D labs, product developers must observe customers in their natural settings to identify their real challenges and pain points. With this empathetic understanding, they can zero in on features that could solve pressing problems of the users.

Home accounting software firm Intuit’s employees spend more than 10,000 hours a year with their customers to analyse how they actually use their software, gaining valuable insight on how to simplify their software so it delivers greater value with fewer features. But you should first quickly design and launch a “good enough” product with a few features that address the customers’ most fundamental need and then improve it to provide greater value over time