Ormita and Income Tax
Tax departments regard one Ormita Credit as having the equivalent value as one dollar of the local currency. Because of this your Ormita transactions must be recorded in the same way that you record your cash sales and purchases.
It is important to remember, however, that business expenses are not subject to “income tax” as they come directly off your bottom-line. By balancing out your sales with an equivalent amount of purchases the tax-effect should be minimal.
If you use your Ormita Credits wisely for business purposes, it will lower you tax liabilities, improve your cash flow, increase your productivity and enhance your net worth.
Using Ormita as Compensation
Spending Ormita Credits can be a great way to provide bonuses or other types of compensation without raiding your company's bank account. Just keep in mind that paying Ormita Credits to employees, like cash, is subject to personal taxes.
Another way to use Ormita Credits for business expenses, while boosting morale and increasing your productivity, is paying for improved office facilities, providing day-care services, offering health benefits, giving staff opportunities to enrol in after-work educational courses, offering company vehicles or paying for employees personal travel in lieu of a cash wage increase.
Taking Ormita as Drawings
Almost every business owner has injected their own personal funds into the company in the hope that one day they will get it back. Ormita provides an opportunity for owners to be repaid in Ormita Credits immediately. In this instance, the repayment should not incur any tax – as you are repaying a business loan, not paying yourself wages.
Remember to treat Ormita income just as you would treat cash. Keep good records, pay your taxes and consult a qualified accountant if you have any questions or problems. If you handle Ormita transactions properly, they can be a useful — and profitable — part of your business.
