• Corporate Tax Notes Pdf

Tax Management Tax management refers to the compliance with the statutory provisions of law. While tax planning is optional, tax management is mandatory. It includes maintenance of accounts, filling of return, payment of taxes, deduction of tax at source, timely payment of advance tax, etc. Poor tax management may lead to levy of interest. In the United States, for example, businesses typically spend far more time on tax planning (around 28%, versus 19.5% in the global sample). Conversely, India-based companies report spending around 28% of their time managing tax controversies, versus 21% in the global sample.

.A corporate tax, also called corporation tax or company tax, is a imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed at state or local levels. The taxes may also be referred to as.

Are generally not taxed at the entity level. A country's corporate tax may apply to:. in the country,. corporations doing business in the country on income from that country,.

foreign corporations who have a in the country, or. corporations deemed to be in the country.Company income subject to tax is often determined much like taxable income for individual taxpayers.

Generally, the tax is imposed on net profits. In some jurisdictions, rules for taxing companies may differ significantly from rules for taxing individuals.

Certain corporate acts, like reorganizations, may not be taxed. Some types of entities may be exempt from tax.Countries may tax corporations on its net profit and may also tax shareholders when the corporation pays a. Where dividends are taxed, a corporation may be required to before the dividend is distributed.The is uncertain.

This section needs expansion. You can help. ( April 2019)Economists disagree as to how much of the burden of the corporate tax falls on owners, workers consumers and landowners, and how the corporate tax affects economic growth and economic inequality. More of the burden probably falls on capital in large open economies such as the US. Some studies place the burden more on labor.

According to one study: 'Regression analysis shows that a one-percentage-point increase in the marginal state corporate tax rate reduces wages 0.14 to 0.36 percent.' There have been other studies.According to the, 'Clausing (2012), Gravelle (2010) and Auerbach (2005), the three best reviews we found, basically conclude that most of the tax falls on capital, not labour.' Legal framework. This section does not any. Unsourced material may be challenged.

( August 2015) A corporate tax is a tax imposed on the net profit of a corporation that are taxed at the entity level in a particular jurisdiction. Net profit for corporate tax is generally the financial statement net profit with modifications, and may be defined in great detail within each country's tax system. Such taxes may include income or other taxes. The tax systems of most countries impose an at the entity level on certain type(s) of entities (company or ). The rate of tax varies by jurisdiction. The tax may have an alternative base, such as assets, payroll, or income computed in an alternative manner.Most countries exempt certain types of corporate events or transactions from income tax. For example, events related to formation or reorganization of the corporation, which are treated as capital costs.

In addition, most systems provide specific rules for taxation of the entity and/or its members upon winding up or dissolution of the entity.In systems where financing costs are allowed as reductions of the tax base , rules may apply that differentiate between classes of member-provided financing. In such systems, items characterized as may be deductible, perhaps subject to limitations, while items characterized as dividends are not. Some systems limit deductions based on simple formulas, such as a, while other systems have more complex rules.Some systems provide a mechanism whereby groups of related corporations may obtain benefit from losses, credits, or other items of all members within the group. Mechanisms include combined or consolidated returns as well as group relief (direct benefit from items of another member).Many systems additionally tax shareholders of those entities on or other distributions by the corporation. A few systems provide for partial integration of entity and member taxation.

This may be accomplished by 'imputation systems'. In the past, mechanisms have existed for advance payment of member tax by corporations, with such payment offsetting entity level tax.Many systems (particularly sub-country level systems) impose a tax on particular corporate attributes. Such non-income taxes may be based on capital stock issued or authorized (either by number of shares or value), total equity, net capital, or other measures unique to corporations.Corporations, like other entities, may be subject to obligations upon making certain varieties of payments to others.

These obligations are generally not the tax of the corporation, but the system may impose penalties on the corporation or its officers or employees for failing to withhold and pay over such taxes. A company has been defined as a juristic person having an independent and separate existence from its shareholders. Income of the company is computed and assessed separately in the hands of the company. In certain cases, distributions from the company to its shareholders as dividends are taxed as income to the shareholders.Corporations, and other common taxes, are generally not referred to as “corporate tax.”Definition of corporation.

Main article:Characterization as a for tax purposes is based on the form of organization, with the exception of United States Federal and most states income taxes, under which an entity may elect to be treated as a corporation and taxed at the entity level or taxed only at the member level. See,.Types Most jurisdictions tax corporations on their income, like the United Kingdom or the United States.

The United States taxes all types of corporate income for a given company at the same rate, but provide different rates of tax depending on income levels or size of the company.The United States taxes corporations under the same framework of tax law as individuals, with differences related to the inherent natures of corporations and individuals or unincorporated entities. Individuals are not formed, amalgamated, or acquired; and corporations do not incur medical expenses except by way of compensating individuals.Most systems tax both domestic. Often, domestic corporations are taxed on worldwide income while foreign corporations are taxed only on income from sources within the jurisdiction.Taxable income The United States defines taxable income for a corporation as all, i.e.

Sales plus other income minus cost of goods sold and tax exempt income less allowable, without the allowance of the applicable to individuals.The United States' system requires that differences in principles for recognizing income and deductions differing from financial accounting principles like the timing of income or deduction, for certain income, and disallowance or limitation of certain be disclosed in considerable detail for non-small corporations on Schedule M-3 to Form 1120.The United States taxes resident corporations, i.e. Those organized within the country, on their worldwide income, and nonresident, foreign corporations only on their income from sources within the country. Hong Kong taxes resident and nonresident corporations only on income from sources within the country. Share of Federal Revenue from Different Tax Sources (Individual, Payroll, and Corporate) 1950 - 2010. Revenue, in% of GDP, from Corporate Income Taxes. For this data, the of GDP per capita with purchasing power parity (PPP) is explained in 2% by tax revenue. Years 2014-17.Examples of corporate tax rates for a few English-speaking countries include:.

Australia: 28.5%, however some specialized entities are taxed at lower rates. Canada: Federal 11%, or Federal 15% plus provincial 1% to 16%. Note: the rates are additive.

Hong Kong: 16.5%. Ireland: 12.5% on trading (business) income, and 25% on non-trading income. New Zealand: 28%. Singapore: 17% from 2010, however a partial exemption scheme may apply to new companies. United Kingdom: 20% to 21% for 2014–2015.

United Kingdom: 20% for 2016. United States: Federal 15% to 35%. States: 0% to 10%, deductible in computing Federal taxable income. Some cities: up to 9%, deductible in computing Federal taxable income. The Federal Alternative Minimum Tax of 20% is imposed on regular taxable income with adjustments.International corporate tax rates Corporate tax rates vary widely by country, leading some corporations to shield earnings within offshore subsidiaries or to redomicile within countries with lower tax rates.In comparing national corporate tax rates one should also take into account the taxes on dividends paid to shareholders.

For example, the overall U.S. Tax on corporate profits of 35% is less than or similar to that of European countries such as Germany, Ireland, Switzerland and the United Kingdom, which have lower corporate tax rates but higher taxes on dividends paid to shareholders. Corporate tax rates across the (OECD) are shown in the table.

Rates within the OECD vary from a low of 8.5% in Switzerland to a high of 34.43% in France, since the United States has recently decreased corporation tax to 22%. The OECD average is 22%. The first column in the table below represents corporate income tax rates mandated by the central government. The second column lists total combined tax rates which, in addition to the government tax rate, may also include various provincial, state and local taxes.

For example, the 2015 provincial corporate tax rates in Canada range from 11.5% to 16% in addition to the federal tax rate of 15%, unless taxable profits of small corporations are low enough to qualify for a lower tax rate. See also:A key issue in corporate tax is the setting of prices charged by related parties for goods, services or the use of property. Many jurisdictions have guidelines on transfer pricing which allow tax authorities to adjust transfer prices used. Such adjustments may apply in both an international and a domestic context.Taxation of shareholders Most income tax systems levy tax on the corporation and, upon distribution of earnings (dividends), on the shareholder. This results in a dual level of tax. Most systems require that income tax be withheld on distribution of dividends to foreign shareholders, and some also require withholding of tax on distributions to domestic shareholders. The rate of such may be reduced for a shareholder under a.Some systems tax some or all dividend income at lower rates than other income.

The United States has historically provided a to corporations with respect to dividends from other corporations in which the recipient owns more than 10% of the shares. For tax years 2004–2010, the United States also has imposed a reduced rate of taxation on dividends received by individuals.Some systems currently attempt or in the past have attempted to integrate taxation of the corporation with taxation of shareholders to mitigate the dual level of taxation.

As a current example, Australia provides for a “franking credit” as a benefit to shareholders. When an Australian company pays a dividend to a domestic shareholder, it reports the dividend as well as a notional tax credit amount. The shareholder utilizes this notional credit to offset shareholder level income tax. A previous system was utilised in the United Kingdom, called the (ACT). When a company paid a dividend, it was required to pay an amount of ACT, which it then used to offset its own taxes. The ACT was included in income by the shareholder resident in the United Kingdom or certain treaty countries, and treated as a payment of tax by the shareholder. To the extent that deemed tax payment exceeded taxes otherwise due, it was refundable to the shareholder.Alternative tax bases Many jurisdictions incorporate some sort of alternative tax computation.

These computations may be based on assets, capital, wages, or some alternative measure of taxable income. Often the alternative tax functions as a minimum tax.incorporates an. This tax is computed at a lower tax rate (20% for corporations), and imposed based on a modified version of taxable income. Modifications include longer depreciation lives assets under, adjustments related to costs of developing natural resources, and an addback of certain tax exempt interest.

State of Michigan previously taxed businesses on an alternative base that did not allow compensation of employees as a tax deduction and allowed full deduction of the cost of production assets upon acquisition.Some jurisdictions, such as Swiss cantons and certain states within the United States, impose taxes based on capital. These may be based on total equity per audited financial statements, a computed amount of assets less liabilities or quantity of shares outstanding.

In some jurisdictions, capital based taxes are imposed in addition to the income tax. In other jurisdictions, the capital taxes function as alternative taxes.Mexico imposes an alternative tax on corporations, the IETU. The tax rate is lower than the regular rate, and there are adjustments for salaries and wages, interest and royalties, and depreciable assets.Tax returns Most systems require that corporations file an annual income tax return. Some systems (such as the and systems) require that taxpayers self assess tax on the tax return. Other systems provide that the government must make an assessment for tax to be due. Some systems require certification of tax returns in some manner by accountants licensed to practice in the jurisdiction, often the company's auditors.Tax returns can be fairly simple or quite complex.

Corporate Tax Notes Pdf

The systems requiring simple returns often base taxable income on financial statement profits with few adjustments, and may require that audited financial statements be attached to the return. Returns for such systems generally require that the relevant financial statements be attached to a simple adjustment schedule. By contrast, United States corporate tax returns require both computation of taxable income from components thereof and reconciliation of taxable income to financial statement income.Many systems require forms or schedules supporting particular items on the main form. Some of these schedules may be incorporated into the main form. For example, the Canadian corporate return, an 8-page form, incorporates some detail schedules but has nearly 50 additional schedules that may be required.Some systems have different returns for different types of corporations or corporations engaged in specialized businesses. The United States has 13 variations on the basic Form 1120 for, insurance companies, foreign corporations, and other entities. The structure of the forms and imbedded schedules vary by type of form.Preparation of non-simple corporate tax returns can be time consuming.

For example, the U.S. States in the that the average time needed to complete form is over 56 hours, not including record keeping time and required attachments.Tax return due dates vary by jurisdiction, fiscal or tax year, and type of entity. In self-assessment systems, payment of taxes is generally due no later than the normal due date, though advance tax payments may be required. Canadian corporations must pay estimated taxes monthly. In each case, final payment is due with the corporation tax return.See also. List of. List ofReferences.

Microeconomic Insights. Retrieved 2017-11-22.

2017-12-04. Liu, Li (2011). The economic effects of corporate income taxation (PhD Thesis). Felix, R.

Alison; Hines, R. Alison (2009).

'Corporate Taxes and Union Wages in the United States'. National Bureau of Economic Research. Felix, R Alison (2009). Economic Review.

Federal Reserve Bank of Kansas City. 94 (2): 77–102. Desai, Mihir A.; Foley, C. Fritz; Hines, James R.

'Labor and Capital Shares of the Corporate Tax Burden: International Evidence'. Felix, R. Alison (2007). 'Passing the burden: Corporate tax incidence in open economies'. LIS Working Paper Series. 2017-10-10.

Arulampalam, Wiji; Devereux, Michael P.; Maffini, Giorgia (August 2012). 'The direct incidence of corporate income tax on wages'. European Economic Review.

56 (6): 1038–1054. Clausing, Kimberly A. (October 16, 2012).

'Who Pays the Corporate Tax in a Global Economy?' National Tax Journal. 66 (1). See United States tax regulations at and.

^. United Kingdom as amended (UK ICTA88) section 6. United States and. LII / Legal Information Institute. Retrieved 2018-10-13. (PDF).

United States Internal Revenue Service. See. Charles Edward Andrew Lincoln IV, Is Incorporation Really Better Than Central Management and Control for Testing Corporate Residency? An Answer to Corporate Tax Evasion and Inversion, 43 Ohio N.U.L. 359 (2017).

LII / Legal Information Institute. Retrieved 2018-10-13. Retrieved 2012-10-08. Bartlett, Bruce (31 May 2011). New York Times. Retrieved 19 September 2012. LII / Legal Information Institute.

Retrieved 2018-10-13. Canada Revenue Agency (2015-03-25). Retrieved 2018-10-13. Peach Wilkinson Accountants. Archived from on 2016-10-06. Retrieved 2016-10-04. Archived from on 2013-07-09.

Retrieved 2012-10-08. Canada Revenue Agency. Retrieved 2012-10-08.

Retrieved 2012-10-08. Retrieved 2012-10-08. Retrieved 2012-10-08. Retrieved 2012-10-08. Retrieved 2012-10-08. (PDF).

OECD i-Library. Organisation for Economic Co-operation and Development. Archived from on 2017-07-02. Taxpayer Services and Debt Management Branch, Taxpayer Services Directorate (July 2005).

Canada Revenue Agency. Government of Canada.

Retrieved 2016-02-07. CS1 maint: Multiple names: authors list.

Singapore Corporate Tax Guide. See, e.g.,. See for the reduced rate of tax for individuals, and (a)(1) and (c) for a deduction for dividends received by corporations. LII / Legal Information Institute. Retrieved 2018-10-13. LII / Legal Information Institute.

Retrieved 2018-10-13. For a discussion of U.S. Principles, see Bittker & Eustice, below, Chapter 3. and. See, e.g., defining events qualifying for reorganization treatment, including certain acquisitions. See for tax effect on shareholders of reorganizations as defined in.

LII / Legal Information Institute. Retrieved 2018-10-13. See, e.g.,. The had proposed complex regulations under this section (see TD 7747, 1981-1 CB 141) which were soon withdrawn (TD 7920, 1983-2 CB 69). An article in Tax Notes, a publication of in 1986 identified 26 factors the U.S. Courts have used to classify instruments as debt or equity.

Also see by Englebrecht, et al. Contrast tax on domestic corporations under and with tax on foreign corporations under. LII / Legal Information Institute. Retrieved 2018-10-13.

LII / Legal Information Institute. Retrieved 2018-10-13. For example, the states in its, “The payee of a payment made to a disregarded entity is the owner of the entity.”. LII / Legal Information Institute. Retrieved 2018-10-13.

LII / Legal Information Institute. Retrieved 2018-10-13.

Note that distributions from an, Regulated Investment Company (mutual fund), or Real Estate Investment Trust are not treated as dividends. Switzerland. ^ New York. Delaware. LII / Legal Information Institute. Retrieved 2018-10-13. LII / Legal Information Institute.

Retrieved 2018-10-13. See, e.g., India. See, e.g., UK Form, which of audited or statutory accounts as filed with the.

Retrieved 2012-10-08. Examples: U.S. Corporations must file Federal income Form 1120 by the 15th day of the third month following the end of the tax year (March 15 for calendar years); but Form 1120-IC-DISC returns are not due until the 15th day of the ninth month; Canadian corporations must file T-2 by June 30. U.S. Corporations must pay estimated taxes for each quarter or face penalties under. Retrieved 2012-10-08.Further reading U.S.

Bittker, Boris I. And Eustice, James S.: Federal Income Taxation of Corporations and Shareholders: paperback,. Kahn & Lehman. Corporate Income Taxation. Healy, John C. And Schadewald, Michael S.: Multistate Corporate Tax Course 2010, CCH, (also available as a multi-volume guide, ).

Hoffman, et al.: Corporations, Partnerships, Estates and Trusts,. Momburn, et al.: Mastering Corporate Tax, Carolina Academic Press,United Kingdom. Tolley's Corporation Tax, 2007-2008.

Watterson, Juliana M.: Corporation Tax 2009/2010, Bloomsbury Professional,External links Canada.United Kingdom.United States.

Corporate tax planning.1.A Quick Revision For NET/GSET Examination Prepared By- Anuj BhatiaBBA, M.Com, GSET, UGC-NET, Ph.D (Pur.) Assistant Professor, Anand Institute of Business Studies Contact: anujbhatia09@gmail.com.Tax Planning Tax planning is the arrangement of financial activities in such a way that maximum tax benefits are enjoyed by making use of all beneficial provisions in the tax laws. It entitles the assessee to avail certain exemptions, deductions, rebates and reliefs, so as to minimize his tax liability. Tax planning imply compliance with the taxing provisions in such a manner that full advantage is taken of all exemptions, deductions, concessions, rebates and reliefs permissible under the Act so that the incidence of tax is the least.Tax Avoidance Tax avoidance is minimizing the incidence of tax by adjusting the affairs in such a manner that although it is within the four corners of the taxation laws but the advantage is taken by finding out loopholes in the laws. The shortest definition of tax avoidance is that it is the art of dodging tax without breaking the law. In the case of tax avoidance, the tax payer apparently circumvents the law, without giving rise to a criminal offence, by the use of a scheme, arrangement or device, often of a complex nature but where the main purpose is to defer, reduce or completely avoid the tax payable under the law.Tax Evasion Unscrupulous citizens evade their tax liability by dishonest means. Some of which are:  Concealment of income;  Inflation of expenses to suppress income;  Falsification of accounts;  Conscious violation of rules These devices are unethical and have to be condemned.

The courts also do not favour such unethical means.