CORPORATE INCOME TAX AND ABILITY TO PAY: THE TAX YEAR AND THE TAX MONTH IN THE CIT

Abstract

This article analyses the levy of the Corporate Income Tax in periods. Based on the notion that the CIT envisages an ability to pay only to be measured at the end of the enterprise, the article identifies the tax periods as the solution for the public budget needs. It considers the CIT legislation over time, where it demonstrates that income tax obligations occur in various tax periods, from year to month, even with estimated tax bases. The article then argues that the year-end tax adjustment determines the tax base in a direct method, thus adjusting the tax burden from the indirect method to the ability to pay of the taxpayer according to a net income principle. It is finally argued that offset of tax losses, as a part of the year-end tax adjustment, also reconciles the levy in periods and the taxpayer right to be taxed according to her profitability.