Chapter 7. Basics of Corporate Taxes and Tax Risk Management
Discuss the main types of taxes.
Explain what tax management is and how it has changed since the 1990s.
Identify the role of the CFO in tax management.
Identify the factors that had a significant impact on tax directors in assessing tax risk.
Explain what tax risk management is.
Discuss the different types of tax risk and the types of events that give rise to them.
Understand the basics of the U.S. federal income tax code as they pertain to corporate taxes: marginal tax rates, tax treatment of interest expense and dividends paid, dividends‐received deduction, depreciation for tax purposes, and net operating losses.
Explain differences in the taxation of corporations in non‐U.S. countries.
Understand the issues of thin capitalization and transfer pricing associated with corporate taxation throughout the world.
Taxes are a significant cost in doing business and have a far‐reaching impact on many corporate decisions—strategy, financing, capital budgeting, and corporate acquisitions/joint ventures. Following are the main kinds of taxes paid by a corporation in the United States:
Income taxes: Taxes specifcally levied on the basis of income.
Employment taxes: Taxes that are based on income, but specifcally on wage and salary income. In the United States, employment taxes are paid by the employee and the employer.
Excise taxes: Taxes on certain commodities, such as alcoholic beverages, ...