Fiscal profit
Tax profit is the amount a company reports before tax returns. This amount may differ from the commercial profit reported in the financial statements because of different tax rules and deductions. Tax profit is primarily used to determine the amount on which a company must pay taxes. It is a crucial factor for tax returns.
The role of fiscal profit
The role of tax profit is to establish the tax base. In other words, it is the basis on which tax rates are applied. This is how to determine how much tax a company owes. Tax profit is used by companies in all industries. It is calculated and applied in every country where corporate taxes apply. It is relevant to both small businesses and large multinationals.
