Profit tax is charged on taxable profit at 34.5% and the annual return is due 30 June.
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The number that catches companies out is not the rate, it is the timing. Profit tax is assessed annually but earned monthly, so a company that has not been provisioning through the year meets the whole liability in one payment. Setting the provision aside as profit accrues turns a cash-flow event into an accounting entry.
A company with ANG 500,000 of revenue and ANG 350,000 of deductible costs has ANG 150,000 of taxable profit and a profit tax liability of ANG 51,750 at 34.5%. That is ANG 4,312 a month of profit that was never the company's to spend. Businesses that discover this at the end of June are not usually unprofitable; they have simply already deployed the cash into stock, staff or drawings. Provisioning monthly turns a cash-flow event into an accounting entry, and it also keeps provisional payments adequate, which matters because underpayment can attract interest.
Business expenditure incurred in earning the profit. Which items qualify, and in what period, is where most of the judgement in a profit tax return actually sits, and it is worth getting reviewed rather than assumed.
Companies that fail to make adequate provisional payments can face interest charges on the underpaid amount, which is why provisioning monthly rather than annually matters.
No, and they are frequently confused. Turnover tax is charged on revenue at 5% and filed monthly. Profit tax is charged on profit at 34.5% and filed annually. A company can owe both.
Extensions are available on request. Requesting one is materially different from simply filing late.
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