At the beginning of the year, companies receive new tax prepayment assessments based on previous financial results. These prepayments have a direct impact on liquidity and cash flow throughout the year.
Many businesses overlook the importance of timely review and adjustment of tax prepayments, which can result in unnecessary financial pressure.
What are tax prepayments?
Tax prepayments represent:
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advance payments of corporate income tax or personal income tax,
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monthly or quarterly obligations determined by prior-year results,
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amounts that significantly influence cash flow planning.
Why review tax prepayments early?
Early review allows companies to:
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assess whether prepayments reflect current business reality,
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request adjustments in case of reduced activity or losses,
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improve liquidity and financial flexibility.
Common issues in practice
In practice, companies often face:
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prepayments based on outdated financial data,
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excessive tax advances,
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missed opportunities for adjustment requests,
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avoidable cash flow constraints.
➡️ Tip: Tax prepayments are not fixed — they can be adjusted if justified with proper documentation.