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The impact of changes in business legal forms for income tax
VOPLAKALOVÁ, Eliška
This work identifies the impact on income tax after the change of a legal form of business for a particular taxpayer. Specifically a change from the natural person to the limited liability company finding a suitable transfer of business property and a reduction of the potential negative tax impacts. A Limited liability company is preferred especially in the respect of limited liability for obligations, protection of partners' assets, easier transferability of a company to another person or tax optimalization. The tax burden on the juristic person can be lower due to a different tax base, other ways of paying rewards and profit and because juristic persons are not subject to social and health insurance. For choosing the right form of business is the comparison of the amount of income tax for a natural person based on the tax records and suggestion of income tax calculation for a juristic person based on accounting, both for the normal business activity of the accounting period and for various forms of transfer of business assets to the new established company. In the case of a selected entity, the change in legal form of business has a positive effect on the final amount of income tax, and its further reduction is possible due to the individual ways of setting payouts for work for the company and profit share, which can be further replaced by non-taxed costs in the form employee benefits. To reduce the negative impact of the transfer of business assets, the selected entrepreneur is recommended to deposit a business asset in the next accounting period, when the taxable income of the transfer does not increase the solidarity tax.
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