Tax Compliance — VP Tax & Compliance

Phase 2 — Corporate Income Tax

2.1 Quarterly Tax Provision (GAAP ASC 740 / IAS 12)

Compute quarterly estimated income tax expense:

QUARTERLY TAX PROVISION WORKPAPER — Q[X] [Year]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

PRE-TAX BOOK INCOME:                    $[X]

PERMANENT DIFFERENCES (never reverse):
  + Non-deductible expenses:            $[X]    (meals 50%, fines, stock comp.)
  - Non-taxable income:                ($[X])   (tax-exempt interest)
  ─────────────────────────────────────────
  Adjusted book income:                 $[X]

TEMPORARY DIFFERENCES (reverse in future periods):
  Deferred revenue (book vs. tax timing): $[X]
  Depreciation differences (accelerated tax): ($[X])
  Stock-based compensation (book expense, tax deduction at exercise): $[X]
  Accruals not yet deductible:          $[X]
  ─────────────────────────────────────────
  TAXABLE INCOME (estimated):           $[X]

FEDERAL TAX (21% for US C-Corp):       $[X]
STATE TAX (blended rate: [%]):          $[X]
FOREIGN TAXES:                          $[X]
R&D TAX CREDITS:                       ($[X])
OTHER CREDITS:                         ($[X])
─────────────────────────────────────────
CURRENT TAX EXPENSE:                    $[X]
DEFERRED TAX EXPENSE / (BENEFIT):      $[X]
─────────────────────────────────────────
TOTAL INCOME TAX PROVISION:             $[X]
Effective tax rate:                     [%]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

2.2 Deferred Tax Assets & Liabilities

Maintain a deferred tax schedule tracking all temporary differences:

Net DTA: Recognize only if "more likely than not" to be utilized. Establish valuation allowance if utilization is uncertain.

2.3 Annual Tax Filing Calendar

Phase 3 — Indirect Taxes (GST / VAT / Sales Tax)

3.1 Indirect Tax on Invoices

For every customer invoice issued:

TAX DETERMINATION CHECKLIST:
  1. Where is the customer located? [jurisdiction]
  2. What type of supply: goods | services | mixed?
  3. Is the supply B2B or B2C?
  4. Is the customer tax-registered? (VAT/GST number on file?)
  5. Where is the supply deemed to occur (place of supply rules)?
  6. What is the applicable tax rate for this supply type?
  7. Any exemptions apply? (export, zero-rated, health, education, etc.)

Common Tax Rate Guide (update per jurisdiction):

3.2 GST/VAT Return Filing Process

Monthly/quarterly indirect tax return:

PERIOD: [Date range]

SALES (Output Tax)
  Taxable supplies at [rate]%:          $[X]   Tax: $[X]
  Zero-rated / exempt supplies:         $[X]   Tax: $0
  Exports:                              $[X]   Tax: $0
  ─────────────────────────────────────────────────────
  Total output tax:                             $[X]

PURCHASES (Input Tax Credits)
  Input tax on goods purchased:        ($[X])
  Input tax on services purchased:     ($[X])
  Input tax — non-recoverable:          $0     (entertainment, etc.)
  ─────────────────────────────────────────────────────
  Total input tax reclaimable:         ($[X])

NET TAX PAYABLE / (REFUND):             $[X]
Due date:                               [Date]
Filing method:                          [portal name]

3.3 US Sales Tax Nexus Management

Track economic nexus thresholds by state:

Alert when approaching nexus threshold in any new state: trigger registration process 60 days before threshold is expected to be crossed.

Phase 4 — TDS / Withholding Tax (India)

4.1 TDS Rate Reference

4.2 TDS Monthly Compliance

TDS COMPLIANCE — [Month]
  TDS deducted (all sections):    ₹[X]
  TDS deposited by 7th of month:  ₹[X]   Status: [On time / Late]
  Quarterly return (Form 26Q):    [Q1: Apr–Jun / Q2: Jul–Sep / Q3: Oct–Dec / Q4: Jan–Mar]
  Form 16/16A issued to payees:   [June 15 for employees / 15th of month following quarter]

Phase 5 — R&D Tax Credits

5.1 Qualifying Activities (US Section 41)

Activities that may qualify for the Research & Development Tax Credit:

• Developing new or improved software/products with technical uncertainty
• Creating new algorithms, models, or processes
• Prototyping and testing (not just beta testing)
• Technical design work by engineers and developers
• Activities intended to discover information to eliminate uncertainty

Does NOT qualify: routine data collection, style or cosmetic changes, post-development support, market research, management studies.

5.2 Documentation Requirements

For each qualifying project:

• Project description with technical uncertainty identified
• Activities performed (by employee name and title)
• Time allocation (% of time spent on qualifying activities)
• Total wages and contractor spend attributable to R&D
• Evidence: code commits, design documents, experiment logs, technical specifications

Credit calculation (simplified):

Qualified Research Expenses (QREs):     $[X]
  Wages for R&D employees:              $[X]
  Contractor costs (65% of payments):   $[X]
  Supplies used in R&D:                 $[X]

Federal R&D Credit = QREs × 6% (simplified method)
State R&D Credits: additional 15–24% depending on state

Phase 6 — Transfer Pricing (Multi-Entity)

6.1 Intercompany Transaction Types

6.2 Transfer Pricing Compliance

• Maintain contemporaneous documentation for all intercompany transactions > $[threshold]
• Review and update intercompany agreements annually
• File Country-by-Country Report (CbCR) if group revenue > €750M
• Benchmark study required for material IP arrangements
• Related-party disclosure in tax returns and financial statement notes

Phase 7 — Tax Compliance Calendar

ANNUAL TAX CALENDAR — [Fiscal Year]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
MONTHLY (recurring every month)
  7th:      TDS deposit (India — all sections)
  15th:     PF/ESI filing (India)
  Last day: GST return GSTR-3B (India)
  Per state: Sales tax returns (US — where registered)

QUARTERLY
  Apr 15:   US Q1 estimated corporate tax payment
  Apr 30:   GSTR-1 (India — quarterly filers)
  Jun 15:   US Q2 estimated corporate tax payment
  Jul 31:   TDS return Form 26Q Q1 (India)
  Sep 15:   US Q3 estimated corporate tax payment
  Oct 31:   TDS return Form 26Q Q2 (India)
  Dec 15:   US Q4 estimated corporate tax payment
  Jan 31:   TDS return Form 26Q Q3 (India)
  Mar 15:   Advance tax Q4 (India)
  Apr 30:   TDS return Form 26Q Q4 (India)

ANNUAL
  Jan 31:   US W-2 and 1099 distribution and filing
  Mar 31:   Annual GSTR-9 (India — if applicable)
  Apr 15:   US corporate tax return (Form 1120) or extension
  Jun 15:   Form 16 to employees (India)
  Oct 31:   India corporate tax return (non-transfer pricing)
  Nov 30:   India corporate tax return (with transfer pricing)
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Quality Rules

• Tax filings are never submitted without a second reviewer's sign-off.
• Estimated tax payments are made early — never wait until the due date.
• Any new business activity in a new state or country triggers a nexus analysis before first transaction.
• All tax authority correspondence must be responded to within 10 business days (or before the deadline stated, whichever is sooner).
• Transfer pricing documentation must be completed before the tax return is filed — not after.
• R&D credit claims must have contemporaneous documentation — create it during the year, not retroactively.
• Never file an amended return without a review of what triggered the amendment and controls to prevent recurrence.