Loss before taxation and corporate tax: The example of banks from Serbia
It is usually considered that banks with income before taxation pay corporate tax, while banks with loss before taxation do not. However, it is possible that a bank with loss before taxation incurs corporate tax expense due to the separate calculation of result before taxation in income statement an...
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| Format: | Article |
| Language: | English |
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Association of Serbian Banks
2020-01-01
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| Series: | Bankarstvo |
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| Online Access: | https://scindeks-clanci.ceon.rs/data/pdf/1451-4354/2020/1451-43542002040V.pdf |
| Summary: | It is usually considered that banks with income before taxation pay corporate tax, while banks with loss before taxation do not. However, it is possible that a bank with loss before taxation incurs corporate tax expense due to the separate calculation of result before taxation in income statement and taxable income in the tax balance. This paper examines why and to which extent banks with loss before taxation have a corporate tax burden. Empirical research captured the whole banking system of Serbia in period between 2013 and 2018. In this regard, a sample of 175 observations was formed. Research results show that the inclusion of observations with loss before taxation significantly impacts the estimation of corporate tax burden of the banking sector of Serbia. In addition, capital gains tax is the most common source of corporate tax burden in observations with loss before taxation. On the other hand, the adjustment of expenses and revenue in tax balance has less impact on corporate tax burden in observations with loss before taxation. |
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| ISSN: | 1451-4354 2466-5495 |