Corporation Tax at a Glance

The corporation tax is applied to entities or corporations on their profit and may be applied in other ways, such as the size of the corporation. The corporation tax may also include a tax on dividends as they are dispersed, but that tax only applies to certain types of corporations.

The corporate tax is often imposed on the net profit of a company, after all allowable deductions have been made. The professional tax rate varies across jurisdictions, as do the allowable deductions. Professional taxes may include taxation on property, the existence of the corporation and the profit of the company. In some cases, corporation taxes are imposed based on the size of the company or the number of shares that company issues.

Although each jurisdiction imposes corporate taxes differently, most jurisdictions tax corporations on the profit if the company. In some cases, the corporation is taxed on the income, but in most cases, the income is allowed to have losses and expenses deducted, which shows the profit of that company. The profit is then taxed at a percentage.

Depending on the type of corporation, there may be allowable tax credits in some jurisdictions. For example, the structure which houses the corporation may receive a tax credit if they use solar energy. In addition, the corporation may receive a tax credit in areas with high unemployment rates, when new jobs are created in the company.

NEXT: What is Income Tax?