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-Illustration of Income Tax

Author: James Chang 106 views

Below we demonstrate an example of corporate income tax, surtax on undistributed profits, and withholding tax on dividends:

AccountCalculationAmount
Salesa1,000
-) Costb-800
=) Gross profitc=a-b200
-) Expensed-30
=) Income before taxe=c-d170
-) Corporate income taxf=e*20%-34
=) Income after taxg=e-f136
-) Dividends to foreign parent companyh-86
=) Undistributed profiti=g-h50
Withholding Tax on Dividendsj=h*21%-18
Surtax on undistributed profitk=i*5%-3
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