Some Tax Rules For Construction Companies

Building of construction projects means erection of structures with bricks, armored concrete and other construction materials. The construction of infrastructure for passenger and freight transportation includes work processes related to roads, bridges, airports, ports, etc. All types of construction apply similar construction methods therefore the following elements should be ensured before the audit:
The landowner or buyer of land upon which the infrastructure project will be constructed should have details of estimates and implementation projects presented for doing the work.
Data on landowners’ shares – land can be property of several families and there can be an agreement to pay for the land which allows for ownership of one or more apartments for each family as a means of payment for the land.
Specific details about the work to be done should be prepared before signing the contract, including costs.
Tax personal number with the address of the building project.
Safety rules and employment contracts as well as collective employment contracts
Data about subcontractors to be used and the agreements specifying their responsibilities.
A budget accompanying the data about how the project is financed.
The term subcontractor implies that the process of work is done through a contract signed with the supplier providing the workers. The subcontractor has all the responsibilities related to the employment of individuals, e.g. payment of social and health insurance contributions and income tax, etc. These payments should form part of the total calculations of the construction project, based on the percentage of work the subcontractor will do. The subcontractor should be paid the entire sum for the work done and he should also have data in the form invoices, prepared by different parties.
What about VAT issues?
VAT should be paid on the amount of work done during the particular month. Invoices between owner/constructor and subcontractor should be standard invoices given by tax administration approval and they should be issued every month. All invoices from other suppliers should be obtained at the moment of supply, e.g. when the cement, iron, bricks, etc. are sent. Other accounting data such as purchase and sale registers should be presented together with the stock inventory and materials already being used in the work process. The data should be presented in the common way the bookkeeping is kept, although accounts may regard a particular construction project.
When a construction contractor is engaged in more than one construction project, the accounts should separately reflect costs for each construction project, in order to determine the final total cost.
At the end of the construction project, a crosscheck is done to verify the amount paid for VAT every month and the VAT to be paid in the final sale. The seller is not required to pay VAT on eventual sales for surface areas, assuming that this is a block of construction projects.
Below are some important issues related to construction taxable revenues:
Preparing a list of subcontractors to be used for this construction project and if possible make a simultaneous audit of each …