Business Taxes

Corporate tax, also called company tax or corporation tax, is a direct tax levied on a company’s income or capital by the government.

Corporate taxation is a difficult aspect in a state's jurisdiction, and rules around it vary a lot from state to state.

Corporate taxes are subtracted from the earnings before tax figure in a company’s income statement to arrive at net income (net profit) generated for a particular period.

What Does Corporate Tax Apply To?

Corporate taxes apply to the following institutions:

• All corporations originated in the country (small, medium, and large)
• Corporations running a business inside the country
• Foreign enterprises with a permanent establishment in the country
• Corporations that are residents for tax purposes inside the country

What is a Tax Return?

A tax return is a special document filed with the tax authority that contains information needed to calculate taxes for an entity. The document specifies reported income, expenses, and other financial information. It consists of three sections:

• Income (mentions all sources of income of an entity)
• Deductions
• Tax credits

After accounting for tax benefits (deductions and tax credits, etc.), taxpayers arrive at their tax return, which is the amount owed to the government in taxes.

Typically, tax returns must be filed annually.