Corporate tax is the tax placed by central or state or local governments on a firm’s income after deducting the cost of raw materials, marketing, research and development, and operations. Corporate taxes vary according to country. Regardless of that, taxes can be lowered with certain deductions and tax reduction techniques, so the final rate is always lower than the initially states one.
Companies can reduce their taxes by showing certain business essential expenditures that include payrolls, benefits, and bonuses to employees, insurances, travel expenses, bad debts, other taxes, bookkeeping expenses, legal services, advertisement costs, etc.
Companies can register as an S corporation to avoid double-taxing. An S corporation’s income is passed onto the shareholders, so the corporation is not levied. Instead, the shareholders are taxed as part of their income. On the flip side, business owners can avoid paying taxes by showing their income as part of the company’s income.