ABSTRACT
Company taxation is a complex matter in which the public-finance, accounting and legal aspects twist and interweave. During the years immediately following the First World War a special tax was levied on the profits of companies to absorb some of the excess profits companies were able to make as a result of the war. A company's taxable profits of the preceding year were liable to tax at the standard rate of income tax, and in addition the taxable profits of the current year, if large enough, were subject to profits tax. The Finance Act of 1965 introduced a corporation tax in place of the two-tier system just described. The corporation tax separates the taxation of companies from that of individuals. The difference between costs and revenue during a specified period of time is profit or loss. The taxation of companies raises many contentious problems and conflicts between the aims of equity and the aims of incentive to investment.
