In simple terms, the corporate tax is a levy on a company’s income profit. But in practice, the amount of corporate tax that a company owes is usually relatively intricate scheme of taxable incomes and deductible and non-deductible expenses combined with different tax rates. Such taxing schemes vary from country to country and may even include different levels of taxation within a country, such as federal taxation and state taxation. Hence, calculating the corporate tax in the real world is not a matter of just applying a tax rate to the EBT (Earnings Before Taxes).
Corporate tax within CASFLO APP
Although it is not possible to set a general corporate tax rate that can simulate the complexity of corporate taxes, as a simplification of the process CASFLO APP uses a corporate tax rate as a proxy, which can be set in the project settings.
CASFLO APP provides a suggested proxy to the corporate tax rate. You can use it, but you should always investigate further if using the suggestion is the correct option given the type of business that you are forecasting.
Corporate tax may vary significantly from country to country and its application is often complex. The table below presents the standard corporate tax rate for OECD countries:
|Country||Corporate tax rate|
This table should be used as a suggestion. You should always verify which is the correct corporate rate that may apply to your project. Be aware that the effective corporate rates may vary due to specific deductions or additions to the tax.