Corporate income tax is a form of direct tax paid on the profits of legal entities during the tax period. This tax is calculated and paid in accordance with legal regulations, and the basic principle is that net profit remaining after deducting business expenses is subject to taxation. Every legal entity generating profit through its activities is required to submit a tax return and pay the appropriate amount of corporate income tax.
Corporate income tax payers are business entities that generate taxable profits. During the year, corporate income tax is paid in the form of monthly advance payments, which are determined based on the taxable profit reported in the tax return from the previous year. The monthly installment is due by the 15th of each month for the previous month. If, during the tax period, the taxpayer experiences significant business changes affecting the amount of advance payments, they may submit a new tax return with a tax balance sheet and adjust the advance payment amount accordingly.
At the end of the tax period, the taxpayer must submit a tax return and calculate the final amount of corporate income tax. If the amount paid through advance installments is lower than the final tax liability, the difference must be paid by the deadline for submitting the tax return. Conversely, if the advance payments exceed the final tax liability, the taxpayer may use the excess as an advance payment for the next period or request a refund.
In the case of delayed payment of monthly advance installments, the taxpayer is required to calculate and pay interest in accordance with tax procedure and administration laws. This means that timely and accurate payment of installments is crucial to avoid additional financial obligations.
The tax system allows for adjustments to tax liabilities in case of significant business changes. A taxpayer may submit a new tax return with a tax balance sheet within 30 days after the end of the period for which the balance sheet is prepared. This ensures a realistic assessment of the tax base and an appropriate advance payment amount.
Certain categories of taxpayers are not required to pay corporate income tax in the form of monthly advance installments. Instead, they pay the full tax amount after the end of the tax period, within the prescribed deadline for submitting the tax return and balance sheet. This payment regime can be beneficial for some taxpayers, but it still requires precise bookkeeping and timely reporting of tax liabilities.
All these provisions aim to create an efficient taxation system that enables legal entities to properly plan their tax obligations and avoid complications related to late tax payments. Understanding the calculation and payment of corporate income tax is essential for effective financial management and avoiding potential penalties.
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