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GCSE Business · key term
A tax on a company’s profits.
Used by Edexcel
Specification 1.5.4 · Paper 1
Revise: The Economy and BusinessCorporation tax is a direct tax on company profits. A higher rate leaves a profitable company with less profit after tax. This can reduce the money it retains for future investment or distributes to shareholders.
Distinguish a tax on company profits from a tax on customer income: corporation tax affects profit available after tax; income tax affects customers’ disposable income.
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