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CONTENTS

                                                                               
Page 
Part I. — GENERAL DESCRIPTION OF INCOME-TAX SYSTEM  235 
1. Taxpayers: 
(a) Individuals  235 
(b) Partnerships  235 
(c) Companies  236 
2. Taxable Income  236 
3. Assessment of Tax  236 
4. Collection of Tax  237 
Part II. — METHODS OF TAXING FOREIGN AND NATIONAL ENTERPRISES: 
A. Foreign Enterprises  238 
B. National Enterprises  240 
Part III. — METHODS OF ALLOCATING TAXABLE INCOME: 
A. Foreign Enterprises with Local Branches or Subsidiaries: 
I. General Questions and Methods of Apportionment: 
(a) Book-keeping and Accounting Requirements  241 
(b) Methods of Allocation  241 
1. Method of Separate Accounting  243 
2. Empirical Methods  243 
3. Method of Fractional Apportionment  243 
4. Requirements for Selection of Methods and Relative Value of the Various Methods  245 
(c) Apportionment between Branch and Parent Enterprise: 
1. Apportionment of Gross Profits of Branch to Real Centre of Management abroad  246 
2. Apportionment of Expenses of Real Centre of Management to Branch  247 
3. Apportionment of Net Profits of Branch to Deficitary Parent or vice versa  247 
(d) Apportionment between Parent Enterprise and Subsidiaries  247 
II. Application of the Methods of Allocation in Specific Cases: 
(a) Industrial and Commercial Enterprises: 
1. Selling Establishments  249 
2. Manufacturing Establishments  249 
3. Processing Establishments  250 
4. Buying Establishments  250 
5. Research or Statistical Establishments, Display Rooms  250 
(b) Banking Enterprises  250 
(c) Insurance Companies  250 
(d) Transport Enterprises  250 
(e), (f) and (g) Power, Light and Gas Enterprises, Telegraph and Telephone Enterprises and Mining Enterprises  251 
B. National Enterprises with Branches or Subsidiaries abroad  251 
C. Holding Companies  251 
ANNEX: Income-Tax Tariff  252 
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