Problems From Tax Audits in the Construction Sector

Among the most common issues in audits of construction projects is the instant of sale by investors paying only personal income tax to the sum of 10% of their incomes from sale and avoiding fiscal obligations.

Taxpayers in the group "Investors" in construction will soon be registered as VAT and profit tax citizens. In reality, this citizen category is going to be subject to gain tax since the sale of residential buildings is exempt from VAT. If you are residing in Canada and looking for tax lawyer you may search the web which Canadian Tax Lawyers are Specialized in Income Tax.

It's up to the investors to select their standing, i.e. whether they create a business and register with the commercial registry or file with the court as a private commercial person.

In case an investor or a group of investors, identified and recognized by the Tax Office needs to enroll, the citizen or group of citizens should supply the citizen with an authorization in accordance with post 12 "Financial Representative" of Law "On financial processes.

During tax intervals, there must be a careful follow-up of the profit tax amount. Another difficulty appearing in audits of residential building activities is the second of supplying practical services by nonresident specialists. Several contractors have been provided answers involving this specific case.

If the "Double taxation arrangement" is in force in their states of residence, the provisions of the agreement will apply in cases of technical services supply performed by non-resident contractors or firms.

If an investor or the landowner has signed a contract with a contractor for the construction of a residential building for private purposes, the work is performed by the constructing firm in the role of only the contractor till the end.

As stated by the instruction from the General Tax Directorate, a minimal VAT per 1m2 of construction surface area in the value of respective interval in the finished inventory applies to every residential construction job. You may visit www.canadiantaxamnesty.ca to know more about taxation.

The first state to meet in the framework of the arrangement is that the firm providing the technical service etc. should be resident in the nation with which the arrangement has been finalized. In such instance, the provisions of the arrangement explain the tax rights in each country.

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