2.4 The interaction of the corporate tax system with the personal tax system 21
2.4.1 Classical system 21
2.4.2 Imputation system 21
2.4.3 Partial imputation system 22
2.4.4 Split rate systems 22
2.4.5 Examples to illustrate the difference between traditional
and imputation systems 22
2.5 Ru...
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, Contents
The CIMA Learning System xvii
Acknowledgements xvii
How to use the CIMA Learning System xvii
Study technique xix
Financial Accounting and Tax Principles xxi
1 Principles of Business Taxation – Introduction 1
Learning Outcomes 1
1.1 Introduction 1
1.2 Taxation as a source of government revenue 2
1.3 Principles of taxation 2
1.3.1 Canons of taxation 2
1.3.2 The American Institute of Certified Public Accountants’ (AICPA)
statement – Guiding Principles of Good Tax Policy: A Framework
for Evaluating Tax Proposals 3
1.4 Basic tax terminology 3
1.4.1 Direct taxes 3
1.4.2 Indirect taxes 4
1.4.3 Incidence 4
1.4.4 Taxable person 4
1.4.5 Competent jurisdiction 4
1.4.6 Hypothecation 5
1.4.7 Withholding responsibilities 5
1.4.8 Tax rate structure 5
1.4.9 The tax gap 6
1.5 Tax bases and classification of taxes 6
1.6 Sources of tax rules 6
1.7 Summary 8
Revision Questions 9
Solutions to Revision Questions 11
2 Direct Taxes on an Entity’s Profits and Gains 13
Learning Outcome 13
2.1 Introduction 13
2.2 The corporate tax base 14
2.2.1 Schedular systems of corporate taxation 14
2.2.2 Classification of income 15
2.2.3 Expenditure 16
2.2.4 Capital gains 19
2.3 Nominal corporate tax rates 21
iii 2006.1
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