MANAGEMENT

Detailed explanation-1: -In simple and plain language, improperly accumulated earnings tax is a penalty tax upon a corporate taxpayer for accumulating so much net income after tax beyond the reasonable needs of the business.

Detailed explanation-2: -A publicly-listed corporation or a corporation owned directly or indirectly by a publicly-listed corporation is not automatically exempt from IAET.

Detailed explanation-3: -The accumulated earnings tax (AET) is a penalty tax imposed on corporations for unreasonably accumulating earnings in the corporation. The tax is assessed at the highest individual tax rate on the corporation’s accumulated income and is in addition to the regular corporate income tax.