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What US companies pays tax

What U.S. Companies Really Pay in Taxes (Analysis)

A study commissioned by Businessconsultants shows that Corporate America pays the IRS anywhere from zero to 400% of income.

FPL Group (FPL), owner of Florida Power & Light, understands the value of alternative energy. By setting up everything from 1,500 acres of solar electric systems in California to wind farms across the U.S., the Juno Beach (Fla.) utility has avoided the need to build 12 new power plants. And those investments create another green benefit: tax breaks. Over the past four years, FPL has paid just $88 million in taxes on earnings of nearly $7 billion. FPL spokeswoman Jackie Anderson says the company is merely taking advantage of incentives to develop renewable resources.

No one likes to pay taxes. FPL paid more than $500,000 to Washington lobbyists last year to keep its tax breaks coming. That strategy seems to work, and corporate tax receipts have been on a steady decline—a trend that could change in the coming months. President Barack Obama's current budget contemplates ending the deferral of income tax on foreign corporate earnings, as well as other tax breaks. At the moment, most companies pay less than the official tax rate of 35%. A study published last summer by the General Accounting Office found that from 1998 to 2005, 55% of large U.S. companies had at least one year of paying no taxes at all.

To get a real-world view of how corporate players fare under the complexities of the tax code, we had data tracker Capital IQ analyze the tax burdens of companies in the S&P 500-stock index. (Like BusinessWeek, Capital IQ is owned by The McGraw-Hill Companies (MHP).) Instead of simply adopting the tax rate that companies report on their income statements, Capital IQ looked at the cash taxes disclosed in footnotes and cash flow statements companies file with the SEC, the closest we can get to what they actually paid in taxes. (An interactive list of the 50 highest payers and 50 lowest payers is available at By dividing that figure by a company's pretax income (excluding extraordinary items) and averaging it over four years to minimize anomalies, we calculated what we consider to be the true tax rate.
The result is a list of players whose tax burdens ranged widely, from essentially nothing to almost 400% of pretax income a year. Troubled industries with weakening profits had the highest tax rates: The auto sector averaged 45.5%, banks paid 50.3%, and real estate companies paid 66.1%. The least-taxed industries were semiconductors, at 19.6%, often because of high expenses in the U.S. and high overseas income. Infrastructure investments helped to keep telecoms at a low 22.2%.

With a prolonged recession and a new Administration in Washington, tax deals could become sparser in the coming year. The new budget calls for the removal of deferred tax payments to oil companies with high drilling costs, for example. That helped Range Resources (RRC) pay just 0.4% last year. CFO Roger Manny insists that ending deferments will hurt the cash flow of his company, discourage exploration across the industry, and lead to higher energy prices.

Of course, tax breaks never die without a fight. Tax lobbying has increased 47% over the past decade, according to the Center for Responsive Politics. Companies complain that the official U.S. rate is higher than every other industrialized nation's except Japan's. But fighting to keep tax rates low is hardly an American phenomenon. As Chas Roy-Chowdhury, head of global taxation at the Association of Chartered Certified Accountants, notes: "It's the same around the world."

With Frederick F. Jespersen, Ellen Gibson, Brian Burnsed, Jane Sasseen, and Greg Spielberg & shamsul


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Tax Year 2008
Tax Year Ended 30.6.2008
Residential Status: Resident
Computation of Tax Payable

Income From Salary (Section 12)

Total Exempt Taxable
Rs. Rs. Rs.
Basic Salary xxxxxx --------- Xxxxxx
Overseas Allowance xxxxxx --------- Xxxxxx
Dearness Allowance xxxxxx --------- Xxxxxx
Cost of living Alloawance xxxxxx --------- Xxxxxx
Bonus xxxxxx --------- Xxxxxx
Commission xxxxxx -------- Xxxxxx

Salary Xxxxx Xxxxxx

House Rent Allowance (when only Allowance is given) Xxxxx -------- xxxxx
Rent Free Unfurnished/Furnished Accommodation
when Option is given
House Rent Allowance
45% or MTS/Basic Salary Whichever is Higher

Wages of Watchmen, Gardner at house paid by empl…

sale tax

Important Supporting Concepts and Tables

Zero-rated Supplies
The supplies which are taxed at the rate of ‘0%’ are called zero-rated supplies these are:-
Exported goods
DTRE (Duty and Tax Remission Exports)

Exempted Sales
Exempted supplies means locally sold goods which are purchase in previous month

Commercial Exporter
Commercial exporter means a registered person who has no manufacturing facility of his own and exclusively makes zero-rated supplies or ‘same stated goods’.

Same Stated Goods
Same Stated goods mean goods purchased by a commercial exporter or manufacturer cum exporter against tax invoice for export as such.

Section 8B(I) SRO 647(1) 2007
Under this section Total input tax should not exceed 90% of the total output tax. It is a maximum limit of input tax in general case. Normally it is given when sales are made to Registered person. However there are some exceptions to the section:
Exception to the section.
This section 8B (1) shall not apply in case of;
Commercial importer
Whole seller

Fair Tax


The FairTax eliminates the tax bias against investment.
Under the FairTax, savings and investments are not taxed at all. As Americans save more money, the pool of funds in lending institutions grows. When you add to this the flood of capital currently trapped offshore, we realize a huge increase in the pool of capital, thereby causing the cost of borrowing funds to drop.
The FairTax dramatically increases investment levels compared to the current income tax system.
Investment is important to all wage earners because of the relationship that exists between real wage rates and the level of capital investment per worker. In fact, the most significant contributing factor to achieving higher real wages is the level of capital investment per worker. A worker or farmer, for example, is more productive if he has more machinery and equipment to work with, particularly new equipment that incorporates the latest te…