We helped a legal and consulting services company build a comparative tax-burden model, determine the optimal tax system and assess whether registering as a VAT payer made sense for 2026.
The client request and the goal of the assessment
The company’s director came to us for accounting outsourcing and asked us to determine which tax system — the general one or the simplified one (single tax for legal entities) — was more beneficial, and whether VAT registration made sense.
Inputs
The model took into account:
- Type of services (legal and consulting)
- Revenue structure: service lines, contract formats
- Cost structure: operating, administrative, outsourced
- Client types (B2B/B2C) and their expectations regarding VAT
- Revenue forecast and growth scenarios
- The accounting organisation model
The comparative model and the decision
On identical inputs we compared the tax burden under the general system and under the simplified system without VAT. The calculation showed that the simplified system without VAT registration lowers the tax burden by up to 38% compared with the general one. A management decision to switch was made.
Criteria for a legal entity switching to the simplified system
Before switching we assessed six criteria:
- Whether the type of activity meets the simplified-system requirements
- Compatibility of the revenue and transaction structure
- The client base and the market’s VAT expectations
- The corporate structure and owners
- Control of the income limit and growth planning
- Accounting readiness and the discipline of internal processes
When VAT makes sense and when it just adds burden
VAT makes sense when the main clients are VAT payers who need an input tax credit, when there is significant input VAT in the supply chain, or when payer status is required by contracts. VAT just adds burden when clients without VAT or B2C prevail, input VAT is minimal, and administration costs more than the potential benefit.
What to prepare before changing the system
For the calculation you will need: a description of the services, the client structure, a breakdown of costs, a revenue forecast, the current accounting model and a rationale for the existing VAT status.
Describe your task
We will suggest a cooperation format and come back with a specific proposal.