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4 Cards in this Set
- Front
- Back
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Double taxation system
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Earnings taxed at corp level
dividends taxed again at shareholder level |
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Split-rate system
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earnings distributed as dividends taxed at lower rate
than retained earnings. dividends taxed again at shareholder level |
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Imputation System
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Taxes paid at corp level attributed to shareholder
shareholders deduct their portion of taxes paid by the firm from their taxes effective tax rate on dividend is shareholders individual rate |
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Double taxation and split-rate systems
formula for effective tax = |
corp tax rate + (1 - corp tax rate)*(individual tax rate)
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