|
|
| |
| Home » Information on Income Tax » Corporate Tax |
| |
Corporate Tax |
|
|
Corporate tax is a tax paid by big companies and other profit making associations of a country. Generally this tax varies noticeably in different jurisdictions. Rate of corporate tax varies substantially depending upon the fact whether the profit has been distributed among the share-holders or not. In many countries tax allowances are offered for the reinvestment of the profit earned by the corporate farms. If a portion of the profit is reinvested by the company immediately the reinvested money will be exempted from taxation. This tax has different names in different countries. In UK it is called corporation tax.
|
The calculation of corporate tax:
The process of calculation of the tax liability of a corporate farm is very complex. This is done in different ways in the different countries. Special allowances from the corporate tax are allowed in many countries,. These allowances are often made in the field of capital expenditure. The money that has been used by the corporate farms for the capital expenditure may be deducted from the corporate tax payable by the corporate houses. The calculation of actual tax liability is really very tough. In may countries in the time of calculating the amount of corporate tax the interest that have to be borne by a corporate farm is deducted from the actual amount of corporate tax payable by the corporate farm. In a country like France depreciation of many of the corporate assets is allowed.
This depreciation is taken into account in the time of computing the corporate tax payable by the corporate farms. However, in a country like UK this depreciation is not taken into consideration in the time of computation of corporate tax.
In many countries imputation tax system is followed in the corporate sector. This is the system which allows a company to attribute a portion of the tax or even the entire tax proportionately to the shareholders of the company.
|
|
|
|
| |
|
|
| |
|
