Whether you are expanding your business operations overseas, taking a contract position in another country, or moving to and from the United States, your taxation is one of the most complex aspects of these events. Taxes and bookkeeping, both personal and business, are already complex with many rules and exceptions, but this area becomes even further complicated when you start dealing with international accounting. It’s important to consider the following areas to determine whether or not hiring a professional is the right decision for your situation.
It can be very easy to inadvertently become non-compliant when starting out with international accounting. Some countries are more lenient than others, while some are very strict and can have convoluted laws and regulations. Your current taxation in your home country even changes once you have financial ventures outside of your country. While mistakes are often accidental, it does little to relieve the punitive sanctions for non-compliance.
To ensure that standards are fair and consistent amongst countries, the International Financial Reporting Standards Foundation (IFRS Foundation) has implemented the International Accounting Standards Board (IASB). This board consists of fourteen members from across the globe and exists to provide clarity and guidance on international accounting issues. As there are always ongoing discussions regarding the creation of new regulations and the clarification of current regulations, it can be difficult, even with this board, to remain current while conducting your business.
Help your business retain profits
Compliance with international accounting rules and laws equals more money staying in your pocket. Non-compliance fines can range in value, but the more severe penalties can leave a lasting mark on your capital.
Sometimes it’s cost-saving for a business to outsource their international accounting function. It takes a lot of time following the news and staying on top of industry trends and standards, and often most businesses can’t afford the time (and therefore money) for their current staff to get up to speed. By outsourcing this function, they get immediate access to accountants who will require less time to do the job the properly.
Personal planning in a foreign country
As business accounting is complicated for international business, personal international accounting is equally as complex. There are taxation considerations that need to be made with regards to the disposition of property, cross border trust, estate planning and marital status changes. Each jurisdiction has their own governing rules, but there can be exceptions and additional standards depending on whether you are a visitor, landed immigrant, on a work visa, or if you are a resident.
It is important to be knowledgeable about international accounting standards if you plan on conducting commerce or pleasure in a foreign country. Failure to do this could results in an unexpected tax bill or, even worse, fines and penalties. Taxation and financial planning is already an area most people aren’t well versed in, putting them at a greater disadvantage in cross-border interactions. In situations like these it may be beneficial to hire a professional who can guide you or perform these functions for you to ensure a seamless endeavour in an international setting.