Hi firstly im new here, been snooping for a while gathering wisdom
But couldn't find an answer on a rather simple issue that i am confused about, and hearing different things from different people doesn't help
Corporation Tax how does it work?
I will use an example to simplify things down:
Year 1
* Company XYZ Ltd earns €100,000 (nice round figure) profit after all costs/expenses
* Company XYZ Ltd has to pay Revenue 12.5% tax on income
* After promptly paying it Company XYZ Ltd has €87,500 left in bank
Year 2
* Company XYZ Ltd earns €100,000 profit again
Now here is where i get confused.
1. does Company XYZ pay corpo tax in year 2 on only the €100,000 made in profit for that year?
2. or does Company XYZ PAY corpo tax in year 2 on €100,000 + €87,500 from previous year?
I feel like its #1 but i've been told its #2 which just sounds really wrong, since you get double taxed?
I know it might sound like a very simple question
but i am rather confused now
Cheers
But couldn't find an answer on a rather simple issue that i am confused about, and hearing different things from different people doesn't help
Corporation Tax how does it work?
I will use an example to simplify things down:
Year 1
* Company XYZ Ltd earns €100,000 (nice round figure) profit after all costs/expenses
* Company XYZ Ltd has to pay Revenue 12.5% tax on income
* After promptly paying it Company XYZ Ltd has €87,500 left in bank
Year 2
* Company XYZ Ltd earns €100,000 profit again
Now here is where i get confused.
1. does Company XYZ pay corpo tax in year 2 on only the €100,000 made in profit for that year?
2. or does Company XYZ PAY corpo tax in year 2 on €100,000 + €87,500 from previous year?
I feel like its #1 but i've been told its #2 which just sounds really wrong, since you get double taxed?
I know it might sound like a very simple question
but i am rather confused now
Cheers