Company Income Tax Return
`Income taxes build a country strong on its own money. Income tax is the additional amount of money paid annually from the income to the government as per the rule of income tax law. Companies play an immense role in incrementing income tax. Income tax return means all the necessary documents provided to tax authorities regarding income and gains, property, profit, loss, and other taxability information. This form is necessary to let know the federal government or tax authority if the individual or a company is applicable for taxpaying or if a taxpayer is overpaying and deserve a return. A company tax return is a form that most companies file each year providing financial information of the company including company earnings, losses, loans or liabilities, and any other information relevant to taxability. Earning sources are to be cited with proper information in this form. Earned income, deduction, tax payable, tax paid and all other relative information have to be congruently added in this form. The income tax return form varies depending on the income source of the taxpayer and the amount of income, taxpayer category, and the amount he earns.
Elements in a company tax return:
A company must file a company tax return if the organization has received any notice to file Company Tax Return’. A company can still then send a return to the authority announcing the loss or bankruptcy in case they do not have to pay company tax. But if a company is capable enough to pay tax on that vary year, they must focus on how to file a perfect company tax return considering the following elements in a company tax return:
- A CT-600 form: CT-600 form and supplementary forms build up company tax return. CT-600 is a part of the company tax return used by companies to calculate the company tax they have to pay.
- Accounts: A company must keep a data book of their financial statements, cash flow, and reports.
- Tax computations: The company hires auditors to make and verify company financial statements report to compute the amount of tax they have to pay on that year.
- Other documents: For tax returns company may need to show other documents like bank statements, drafts, and third-party authentication to the tax authority.
Who must file a Company Income Tax Return?
Tax is the most earned revenue of a country which helps to run country affairs smoothly. Every company that is doing business over the country capable of paying tax must participate in taxpaying. If a company does business in a country enjoys their rights from the country and earns profit from the business, acquiring properties, or any other investment for a year he is bound to fill up a company income tax return. A bankrupt company or a company in a loss can return the ‘Company Tax return’ notice to not to pay tax but still have to file a company tax return on time. The income amount is pre-decided by the federal government or tax authority of the country. Also, the income tax return is necessary for the followings:
- Unless a dormant company all Limited corporations have to file a company tax return.
- A non-profit organization, facing court judgements companies don’t have to file company return tax
- Sole businesses and partners in a partnership don’t need to file a company tax return but to report their earnings as a personal income tax return.
- A company needs to file a company income tax return to claim any losses over the year.
The consequence for not filing in time
All companies capable enough to pay income tax have to file a company income tax return upon receiving notice. A company cannot outrun this even time limit exceeds. Primarily 12 months are given to every company established in the country and eligible to pay tax for filing the income tax return. On failing to file in the given time taxpayer will face punishment set by the tax authority. If someone fails to provide an income tax return on time and do not ask for any extensions the person shall face some consequence which is given below:
- Tax authority imposes a fine from the expiration of filing a company tax return. 100-euro costs per day for late filing of the company tax return. If it turns to 3 months late the company face a further 100 euro fine. For six months late 10 percent interest will be added to the tax fining bill. If a year passes out the company will face another 10 percent.
- The income tax return is a necessary item for earning Tax Clearing Certificates (TCC).
- In any possible means, the company could not file a tax return in time the taxpayer company shall receive interest debt with paying tax alongside punishment.
Though interest imposed on the non-taxpayer company, the company still add this interest in company expense and make it tax-deductible.