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This paper presents information and research on the corporate tax to help better understand and evaluate arguments presented in the tax reform debate. This report first reviews the structure of the corporate income tax. Data on which companies pay the corporate tax and the international comparison of corporate tax rate are also being discussed on this paper. And the comparison of the three countries Iraq, USA and Malaysia will be discussed and Next, the economic effects of the corporate tax are reviewed, including a discussion of the purpose of the corporate tax, and how to evaluate alternative corporate tax systems. The paper views broad reform options and concludes with some recommendation for better tax system.Many countries impose corporation tax or company tax on the income or capital of some types of legal entities. A similar tax may be imposed at state or lower levels. The taxes may also be referred to as income tax or capital tax. Entities treated as partnerships are generally not taxed at the entity level. The Ralph Review of Business Taxation represented a major event in corporate tax reform (Cooper et al., 2002, p. 20; Gilders et al., 2004, p. 16). Most countries tax all corporations doing business in the country on income from that country. Many countries tax all income of corporations organized in the country. The tax generally is imposed on net taxable income. Net taxable income for corporate tax is generally financial statement income with modifications, and may be defined in great detail within the system. 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. 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). Comparing tax systems is important for economic agents since taxes affect their decisions. When locating or doing business, companies assess tax consequences of their actions. Most surveys approach the question by comparing statutory corporate tax rates. Nevertheless, given the complexity and the diversity of elements composing the tax base, this approach has been deemed to be unsatisfactory. the political process in their favor, engage in tax-planning and organize their activities to achieve optimal tax savings (Siegfried, 1972, pp. 32–36). Statutory rates do not perfectly reflect the tax burden of companies and economists had to come up with measures of effective corporate taxation. Effective corporate tax rates are important for different reasons. First, comparing statutory and effective tax rates gives an idea of tax incentives given by authorities. These incentives can be either a lower tax base or a lack of enforcement. Second, the comparison of effective tax rates across countries gives indications whether there are substantially different tax treatments of companies with the same characteristics but located in different countries.
Economic and political weekly
Corporate Income and Incidence of Corporate TaxationAccount and Financial Management Journal
A Theoretical Review on Global Trends of Company Income Taxes and Alternatives of Tax Reforms2019 •
There are issues challenging the validity of existing company tax regimes to better serve the principle of effective, efficiency, fairness and accountability of public interest. This has in turn lead to an initiative of company tax reform seeking new way to design a system that is promoting competitiveness and generating steady stream of tax revenues flow. Therefore, this study aimed to provide brief reviews of literatures in which discuss the emerging trends of company income tax in global and possible tax reforms. A comprehensive review of company tax bases and rates are then employed. Data that is depicting the trends of company tax rates across these years are then being overviewed, compared, and evaluated. The importance of company’s taxation, concept of company tax base and rates, trends and comparison of global income Tax, tax competition and tax reforms are reviewed. It can be concluded from the literature review that most of the trends in jurisdictions are reducing tax rates to demonstrate their competitive. Also, the global trade tax circumstances have varied radically over past few decades and impair the effectiveness of company taxation administration policies nowadays to remain competitive and generate sufficient incomes without disrupted by aggressive profit shifting. Therefore, future studies should explore areas like tax transparency and country to country reporting, unitary tax system and tax cooperation in order to ensure effective and efficient tax reforms.
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