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CA Final Taxation of Companies — practice questions

Explore 50 free Taxation of Companies questions in CA Final Taxation. Open each question or exercise to read its content, reference answers and available explanation.

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Taxation of Companies questions and exercises with answers

Showing questions 1–30 of 50.

Corporate tax is levied at entity level on which base?Read the answer and worked solution →A company is treated in tax law as which kind of person?Read the answer and worked solution →In whose hands is the income of a company computed and assessed?Read the answer and worked solution →Company profit is taxed again when paid out to whom?Read the answer and worked solution →Which of these is generally treated as a corporate tax?Read the answer and worked solution →If a company fails to withhold tax, who may face penalties?Read the answer and worked solution →How are domestic and foreign corporations usually taxed?Read the answer and worked solution →How is formation of a corporation by a controlling corporate shareholder treated?Read the answer and worked solution →In a tax free formation, tax attributes of assets do what?Read the answer and worked solution →A new company assumes a loan above asset basis less accrued liabilities. Result for owners?Read the answer and worked solution →Which of these may be a tax free reorganization under most systems?Read the answer and worked solution →Why is interest paid to related parties often limited as a deduction?Read the answer and worked solution →A limit based on a simple debt-to-equity ratio restricts which deduction?Read the answer and worked solution →How do most jurisdictions tax a foreign corporation's business income earned locally?Read the answer and worked solution →Why do many countries levy a branch profits tax?Read the answer and worked solution →Which deductions of branches are commonly limited by jurisdictions?Read the answer and worked solution →Most jurisdictions let corporate losses be deducted in which periods?Read the answer and worked solution →A few jurisdictions allow a loss to be used by amending which year's income?Read the answer and worked solution →What is the UK's pairwise loss sharing among group companies called?Read the answer and worked solution →What is the Netherlands group mechanism of a single return called?Read the answer and worked solution →Under Australian franking, a company reports a dividend with what?Read the answer and worked solution →Which past UK system required a company to pay tax in advance when it paid a dividend?Read the answer and worked solution →How can the withholding rate on dividends to a foreign shareholder be reduced?Read the answer and worked solution →Most systems require income tax to be withheld on dividends paid to which shareholders?Read the answer and worked solution →What role does an alternative tax computation often serve?Read the answer and worked solution →Alternative corporate tax computations may be based on which measure?Read the answer and worked solution →The US federal alternative minimum tax on corporations was imposed at what rate?Read the answer and worked solution →A key corporate tax issue is the price charged for goods or services between whom?Read the answer and worked solution →One justification offered for corporate tax is that it is what, compared with taxing people?Read the answer and worked solution →Corporate income tax can be viewed as a levy firms pay for what?Read the answer and worked solution →

Worked practice questions

Corporate tax is levied at entity level on which base?

  1. Share capital of the corporation
  2. Gross turnover of the corporation
  3. Dividends paid to members
  4. Net profit of the corporation
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Correct answer: D. Net profit of the corporation

A corporate tax is charged on the net profit of a corporation, taxed in the hands of the entity itself.

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A company is treated in tax law as which kind of person?

  1. An agent of its members
  2. A trustee for its creditors
  3. A partnership of directors
  4. A separate juristic person
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Correct answer: D. A separate juristic person

Law treats a company as a juristic person with an existence independent of its shareholders, which is why it is taxed on its own.

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In whose hands is the income of a company computed and assessed?

  1. Its directors, as individuals
  2. Its shareholders, as members
  3. The company itself, separately
  4. Its auditors, on its behalf
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Correct answer: C. The company itself, separately

The income of the company is computed and assessed separately in the hands of the company, not of its members.

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More Taxation topics

Double TaxationTransfer PricingDeduction, Collection and Recovery of TaxIncome Tax DepartmentPermanent Account NumberBasic ConceptsAnti-avoidance ProvisionsAppeals, Revision and Dispute Resolution