Taxable profit
Profit is the most important category in the sphere of market relations. In this regard, it performs a number of basic functions.
Thus, profit is the indicator most fully reflecting the efficiency of production and assessing the economic activity of the enterprise. This function is evaluative.
Profit also has a stimulating effect aimed at increasing the efficiency of the financial and economic activities of the organization. This function is stimulating.
In addition, profit serves as a source of formation of extra-budgetary funds and budgetary resources. This function is called fiscal.
In the budgets, income is received inform of taxes. Together with other revenue streams, it is used to finance various needs, state production, investment, social, scientific and technical programs, as well as to ensure the performance of public functions.
In the process of evaluating and planning financial andeconomic activity of the organization, as well as when redistributing the income that remained at its disposal, certain indicators are applied. Net and taxable profits are important informative indicators of the company's activity. The first concept implies the income remaining at the disposal of the organization.
But taxable profit is the mainobject when levying a profit tax. Of great importance is the organization of management of the formation of this part of income. At the same time, changes in gross costs of circulation and production, in gross income of the organization are taken into account.
Taxable profit is also taken into account, the formula of which contains the index of the adjusted income, reduced by the amount of gross costs and the amount of depreciation.
Legislation provides for specifictaxation opportunities for enterprises. In particular, organizations independently determine the taxable profit, the amount to be paid to the budget.
In accordance with the law, there are severaltypes of deductions for income. So, allocate a tax on dividends, payment of winnings, repatriation of income, other taxes withheld in the process of income payment. This classification avoids various problems. In particular, double taxation of profits. Having made the necessary deductions, the organization receives a net income.
Net and taxable profits aresignificant differences. So, in the use of net income, no bodies, including state ones, have the right to interfere. At the same time, taxable profit provides fixed deductions.
In accordance with market conditions of referenceeconomic activities are formed the priority areas for the use of net (own) income. So, in connection with the development of competition, there is a need to expand production, improve it, and also meet the social and material needs of workers' collectives.
The remaining income is divided into twoparts. The first part is aimed at increasing the company's property, participating in the accumulation process. It should be noted here that it is not necessary to use all income aimed at accumulation completely. The remaining share of unused profit in this case has a large reserve value. In the future, this reserve can be used to cover probable losses or finance costs. This income is called unallocated.
The second part of the profit goes to consumption. Spheres of accumulation and distribution of own income are determined by the company independently.
