BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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sole proprietorship
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partnership
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corporation
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none of the above
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Detailed explanation-1: -It is a situation in which corporate earnings are taxed twice at two different levels but include the same income. A corporate organization’s net income is taxed as corporate tax, and when the same income is distributed to shareholders as a dividend, it is again taxed by way of a dividend tax.
Detailed explanation-2: -Most commonly, double taxation happens when a company earns a profit in the form of dividends. The company pays the taxes on its annual profits first. Then, after the company pays its dividends to shareholders, shareholders pay a second tax.
Detailed explanation-3: -C corporations are the only business type that experience double taxation. Again, the corporation only pays taxes once itself. Double taxation occurs when dividends paid to shareholders get taxed at the shareholders’ individual rates after they’ve already been taxed at the corporate level.
Detailed explanation-4: -Double taxation generally falls into one of two categories: duplicated services or jointly financed services.