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Corporate taxes

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megha agarwal

megha agarwal (Querist)
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24 May 2014 what are corporate taxes?? what is the treatment of these taxes in cash flow statement?

Vineet Kumar Sharma

Vineet Kumar Sharma (Expert)
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25 May 2014 Corporate taxes is the tax levied by the government on the income earned by the body corporates. For example, in India, the corporate tax rate is 33.99% on domestic companies. In US, it is ~40%.

Treatment of Corporate Taxes in Cash Flow statement (Indirect Method):

Under Cash Flow from operating activities, you are required to add back the provision for taxes in 'Net income after taxes'; and deduct the amount of corporate income tax paid.

Cash Flow from Operating Activities:
Net Income after taxes
(+) Provision for Taxes
(-) Corporate Income Tax Paid

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