Business and Corporate Tax

Business and corporate tax pages explain tax concepts that affect company cash flow, entity structure, reorganizations, and shareholder value.

This section keeps corporate tax, corporation tax, selected entity rules, deferred-tax effects, and reorganization tax concepts separate from household income-tax pages and tax-administration detail.

In this section

• Corporate Distributions, Reorganizations, And Stock Compensation
  Taxation terms for dividends received deductions, earnings and profits, NSOs, PFICs, and tax-free reorganizations.
  • Dividends-Received Deduction: A Corporate Tax Rule That Reduces Double Taxation
    Learn what the dividends-received deduction is, who can claim it, and why it matters when one corporation owns stock in another.
  • Earnings and Profits: The Tax Measure of a Corporation's Capacity to Pay Dividends
    Learn what earnings and profits means in tax analysis, how it differs from taxable income, and why it matters for dividend treatment.
  • Non-Qualified Stock Option (NSO): Meaning and Tax Context
    Learn what a non-qualified stock option is and why it differs from tax-favored equity compensation structures.
  • Passive Foreign Investment Company (PFIC): Definition, Criteria, and Tax Implications
    Learn about Passive Foreign Investment Companies (PFICs), including their definition, criteria for classification, and the tax implications for U.S. investors.
  • Tax-Free Reorganization: A Transaction That Meets IRS Requirements to Avoid Immediate Tax Consequences
    Understanding Tax-Free Reorganization—transactions structured to meet IRS requirements to avoid immediate tax consequences, types, historical context, related terms, and frequently asked questions.
• Corporate Income Tax And Withholding
  Taxation terms for corporate tax, corporate tax rates, withholding tax, consolidated returns, and accumulated earnings tax.
  • Accumulated Earnings Tax (AET): Prevention of Avoiding Shareholder Taxation on Dividends
    Learn what Accumulated Earnings Tax (AET) means, how it works in finance, and why it matters in practical analysis and decision-making.
  • Consolidated Tax Return: Meaning and Corporate Use
    Learn what a consolidated tax return is, why affiliated companies file one, and how it differs from separate entity tax reporting.
  • Corporate Tax Rate: Meaning and Example
    Learn what the corporate tax rate is, how it applies to business income, and why the statutory rate and effective rate can diverge.
  • Corporate Tax: Meaning and Example
    Learn what corporate tax means and why taxes on company profits affect cash flow, valuation, and capital-allocation decisions.
  • Withholding Tax: Tax Collected at the Source of Payment
    Learn what withholding tax is, how it works on wages and cross-border payments, why it matters for cash flow and compliance, and how it differs from the final tax bill.
• Profit Shifting, Transfer Pricing, And Tax Credits
  Taxation terms for profit shifting, profit-split methods, pretax earnings, and credit-reduction mechanics.
  • Credit Reduction
    Credit Reduction occurs when states owe money to the federal unemployment trust fund, thereby reducing the Federal Unemployment Tax Act (FUTA) credit rate for employers in that state.
  • Pretax Earnings or Pretax Profit: Profit Before Income Taxes
    Learn what pretax earnings mean, how they differ from operating income and net income, and why analysts use pretax profit to compare businesses across tax regimes.
  • Profit Shifting: Moving Profits to Low-Tax Jurisdictions
    An in-depth look into the practice of profit shifting, which involves transferring profits to low-tax jurisdictions to reduce tax liability.
  • Profit Split Methods: Divide Profits by Contribution Ratios
    An analytical approach to allocating profits between parties in a transaction based on their respective contributions, commonly used in licensing agreements and joint ventures.