Abstract
This chapter deals with taxation of different legal entities. In detail taxation of sole proprietorships and partnerships on the one hand and corporations on the other hand are explained. We show how tax bases are defined, describe one-book and two-book accounting systems and further discuss advantages and disadvantages of the existing accounting systems. Moreover, we show how different types of corporate tax systems work and provide examples how countries apply the corporate tax systems discussed. Further, we discuss avoidance mechanism of triple taxation. After explaining the legal framework for corporations, we present a Standard Model for corporations taking taxes into account. In particular, we discuss the cases of financing the initial investment by retained earnings or new equity. Concerning distribution policies, we investigate immediate dividend distribution and retention of cash flows.
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Schanz, D., Schanz, S. (2011). Introduction to Business Taxation. In: Business Taxation and Financial Decisions. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-03284-4_6
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DOI: https://doi.org/10.1007/978-3-642-03284-4_6
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