Corporate tax has to be paid on profits generated in the accounting period. Corporations that are resident in one of the new member states are subject to corporate income tax on their worldwide income. Corporate residence depends on the fiscal domicile or place of management. This chapter discusses European corporate taxation and different Value-added tax (VAT) rules. VAT is an indirect tax. When a firm purchases material or services from a supplier, a VAT percentage is added to the invoiced amount. Tax systems differ mainly in respect of their treatment of dividend, particularly ways of avoiding double taxation. International tax planning is exceptionally complex, but can involve enormous rewards in terms of lower taxes for multinational companies. VAT rates are expressed as a percentage of the taxable amount, which, in respect of imported goods is the value for customs purposes.