|
As more and more opportunities present themselves for doing business overseas, this option is no longer the exclusive province of the multi-national organisation. Many small to medium enterprises in Australia are now regularly trading across international borders and while the world is literally now our oyster, it presents its own unique challenges. Aside from the immediately obvious ones of language, customs, culture and location, there is also the issue of financial reporting to either a board of directors, shareholders, other stakeholders and the taxation authorities. This financial reporting cycle varies around the world, with a number of countries, reporting for accounting Dec – Jan or a full calendar year. This arrangement is at odds with the Australian financial cycle which is a fiscal or financial year, and is tied to the Federal budget cycle. Australia is one of the few countries that tie all its financial reporting into the same timeframe. The Pakistan, Egypt and New Zealand governments have the same budget cycle, but their reporting for taxation purposes is different. In fact, the timeframes are so different in many countries that advice should be sought from a Business accountant Brisbane, specialising in international reporting, for any business trading across borders. Many countries use the calendar year as the financial cycle, but have different times during the year when tax returns must be lodged. For example, Japan uses the accounting Dec – Jan timeframe for income tax, but corporate tax is charged according to the corporation’s own one-year period. China keeps everything simple by starting the fiscal year for all entities on 1 January, with everything tied into the calendar year including the tax year, statutory year and planning year. In New Zealand, the company and personal financial year begins on April 1, ends on March 31 and applies to both company and personal income tax. Before 1976, the US cycle was the same as Australia’s i.e. July to June, but a change was passed to allow Congress more time to frame a budget. The government cycle is now October 1 to September 30, and is divided into quarters. The tax year for business is governed by which quarter it chooses to start the cycle. The one saving grace in all of this confusion is that most computerised accounting software is date-driven, allowing reports to be run to suit any timeframe. Provided all the data is entered correctly, a full set of financials can theoretically be run for any period simply by entering the required dates into the software. However, such a complex issue should still be reviewed by a Brisbane business accountant before acting on the information. While it seems simple enough to report for accounting Dec – Jan there are many other variables in the international community, enough to make it an exercise for experts. A small trader trying to operate without professional advice would find it very difficult.
Related Articles -
Business Accountant Brisbane, Brisbane Business Accountant,
|
