Can anyone explain compliance and provisions tax?

[jatin]

I often come across the terms “tax compliance” and “tax provisions” when reading about accounting and business taxes. Can someone explain what each means in simple terms? How do they differ, and why are both important for businesses during tax filing and reporting?

 

[Sophie]

Tax compliance requires adherence to all tax statutes, filing the necessary forms, and remitting all taxes owed. Provisions tax relates to reserving funds for taxes that may come due in the future or taxes a taxpayer has anticipated will be owed.

 

[Mayank]

Compliance and provisions tax refer to adhering to tax laws and creating financial provisions for future tax liabilities. Compliance ensures proper filing and payment, while provisions allocate funds in accounts to cover expected taxes, maintaining financial transparency and accuracy.

 

[Shane Warne]

Tax compliance refers to abiding by all the tax laws such as filing the returns and paying the taxes in time. Tax provisions as the estimated taxes that a company allocates to make payments in the future. Compliance is doing what is right now; provisions is having plans all along. The two ensure legal protection of businesses as well as financial preparedness.

 

[BlissCore]

Sure! Tax compliance is simply ensuring that a business observes all tax laws and submits returns in the right and at the right time. The difference is that tax provisions are the sums that a firm prepares in its accounts to pay taxes that the firm is bound to pay.Compliance is concerned with abiding by the rules whereas provision is concerned with planning and keeping tax records. Both are significant as compliance prevents punishment and conditions are set in place to make sure that the company is financially ready to pay its taxes.

 

[robertwilliam]

In taxation terms, tax compliance is defined as the process of full and timely fulfilling all legal tax obligations by, for instance, filing accurate tax returns and paying taxes on time, whereas around the tax provision, an accounting estimate of the income tax the company anticipates owing for a specific period is presented in its financial statements, which are meant for internal and investor transparency.