Building of construction projects means erection of structures with bricks, armored concrete along with construction materials. The construction of infrastructure for passenger and freight transportation includes work processes associated with roads, bridges, airports, ports, etc. All sorts of construction apply similar construction methods meaning that the following elements really should be ensured prior to the audit:
The landowner or buyer of land where the infrastructure project will likely be constructed ought to have details of estimates and implementation projects presented for working on the project.
Data on landowners’ shares – land might be property of numerous families and there could be an agreement to afford the land that allows for ownership of merely one or more apartments per family as a way of payment with the land.
Specific specifics of the work being done must be prepared contracts the contract, including costs.
Tax personal number using the address in the building project.
Safety rules and employment contracts along with collective employment contracts
Data about subcontractors to become used plus the agreements specifying their responsibilities.
A budget accompanying the info about how the project is financed.
The term subcontractor means that the process of effort is done through an agreement signed using the supplier supplying the workers. The subcontractor has every one of the responsibilities in connection with the employment of people, e.g. payment of social and medical health insurance contributions and tax, etc. These payments should form part with the total calculations from the construction project, in accordance with the percentage of training the subcontractor will work. The subcontractor ought to be paid the whole sum for your work done and hubby should also have data inside form invoices, made by different parties.
What about VAT issues?
VAT ought to be paid for the amount at work done throughout the particular month. Invoices between owner/constructor and subcontractor ought to be standard invoices distributed by tax administration approval and they needs to be issued monthly. All invoices off their suppliers must be obtained right now of supply, e.g. if the cement, iron, bricks, etc. are sent. Other accounting data including purchase and sale registers ought to be presented together while using stock inventory and materials already being utilized in the effort process. The data ought to be presented inside common way the bookkeeping is kept, although accounts may regard a selected construction project.
When a construction contractor is engaged in many construction project, the accounts should separately reflect costs for each and every construction project, to be able to determine the last total cost.
At the end with the construction project, a crosscheck is completed to verify the total amount paid for VAT every month plus the VAT for being paid inside the final sale. The seller is not required to repay VAT on eventual sales for surface areas, let’s assume that this is a block of construction projects.
Below are a few important issues associated with construction taxable revenues:
Preparing a directory of subcontractors to become used just for this construction project and when possible create a simultaneous audit of every subcontractor.
Each construction project is followed by a construction plan with amount of floors, rooms, etc.
Asking the technical director on the construction project regarding the system used against theft as well as the type of safety from the construction site (private guards, etc.).
After the building project has finished, matching the total variety of windows, shower units and other alike things while using respective invoices and send periodic references for the respective tax office administering the suppliers in order being able to compare the information during the next audit of suppliers.
If we have an agreement allowing the transfer of property of some apartments to be able to individuals, by way of example, since they owned the land, it’s important to examine the content of each one agreement as a way to determine the compensation value received through the landowners. This will work as one on the orientations to refer to when re-characterizing the sale price.
In addition into a detailed audit of monthly declarations for the progress on the job done throughout the month, both main following audits needs to be randomly conducted.
Since it is currently a common practice to use workers with virtually no kind of documentation, it is necessary, with a case basis, to surround construction sites with fences and interview employees found within the site at this time and afterward comparing these with employment contracts.
– Each individual inside the development site territory must be identifiable, with names, numbers, etc. This should match the information made available by principal contractors and subcontractors.
– The information through the state labor inspectorate in relation to safety measures and site being audited are going to be necessary to produce maximum effect.
– After the inspectorate and auditors being engaged within the audit are informed, they need to immediately be sent to the building site to be able to prevent different individuals from sending the information on the sites to get audited as well as the time with the audit.
– Only a minimum quantity of staff ought to be engaged in this treatment solution and no data ought to be provided with regards to when and where the audits is going to take place.
The second exercise includes exactly the types of common investigation. After produced project has finished, the contractor transfers the property towards the investor financing from the project or those who will either use or sell the apartments.
– Determining the market industry price for apartment sales and calculate the whole possible sales through: – an investigator from tax office which shows his interest to acquire an apartment block would still find it pretty an easy task to determine the actual sale price – the additional value received as compensation percentage on the total construction project (landowner/project expanse in m² = sale price); – the significance applied by domestic and international institutions and organization with good reputation (banks, institutes, organizations, public institutions, etc.).
– Considering the value with the construction project currently it is finalized, calculate the gain level make certain that the net income is reflected in company’s accounts or individual sales of apartments by year.