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Taxes

Imputation system

In finance, we often come across the term "imputation system". It refers to a tax system where a portion of the tax paid by a company on its profits is offset against the tax liability of shareholders who receive distributions from the company's profits. This system aims to avoid double taxation on corporate profits and incentivize companies to distribute their earnings to shareholders in the form of dividends. Essentially, it allows shareholders to benefit from the company's tax payments. This is a common practice in many countries, and understanding its implications is crucial in the world of finance.

Sham transaction

A tax strategy often utilized by companies, a transaction without substance lacks any real economic or business purpose and is designed solely for the purpose of minimizing ...

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Management expenses

When it comes to calculating taxable profits for a trade, the expenses of management are typically deductible. However, for a group of companies, it becomes crucial to deter...

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Compensation

As an educator in the field of finance, it is crucial to understand the concept of rewards in a business setting. In this context, rewards refer to both monetary and non-mon...

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Capital loss

Capital gains are the profits obtained from the sale of a capital asset. However, in the event of a loss, it is referred to as a capital loss. This can occur when an asset i...

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