What is Corporate Income Tax (CIT)?

A tax imposed on profits (chargeable income) generated by a company in any year of assessment. 

Who is liable to pay company income tax?

Companies are liable to pay corporate tax.

How to calculate a company’s chargeable income?

A company’s chargeable income is calculated by deducting all allowable expenses from the gross income in any year of assessment.

That is, Chargeable income = Gross income – Allowable expenses.

Gross income refers to all income derived by the company other than exempt income.

Allowable deductions are expenditure, losses or allowances which are deductible under the Income Tax Act.

What are the tax rates applicable to companies?

The chargeable income of companies, other than manufacturing companies are charged tax at the rate of 25% (standard rate).

The chargeable income of manufacturing companies and commercial farming is subjected to tax at the rate of 10%.

When should a company file a corporate income tax return? 

A company must file an income tax return on or before the 30th of June every year, or on or before the last day of the third month following financial year end if the company uses substituted accounting period.  

When is the corporate income tax payment due? 

Payments should be made on or before 30th June each year, unless the company has been granted permission to use a substituted accounting period.

Companies are also required to pay provisional tax by submitting tax estimates within the first six months of their accounting period. Provisional tax is paid in three equal instalments, each representing 30% of the previous year’s actual income tax liability, and is payable on a quarterly basis:

• 1st installment: by the end of the sixth month from the beginning of the accounting period.
• 2nd installment: by the end of the ninth month from the beginning of the accounting period.
• 3rd installment: by the end of the twelfth month from the beginning of the accounting period.

Find the guide on the attachments below

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