Calculation of a company's tax income
Verified 26 May 2023 - Legal and Administrative Information Directorate (Prime Minister), Ministry of Finance
The tax result determines the taxable base to determine the business tax (SI) or income tax (IR) payable by the company. It is obtained from the accounting result on which the non-deductible expenses must be reinstated and then the tax deductions deducted.
The accounting result shall be determined at the end of each accounting year when the annual accounts are drawn up.
It matches the duty-free turnover (or products) realized during the year less charges linked to the company's activity. It corresponds to the formula: Products - Expenses
It is indicated in the profit and loss account.
When the accounting result is positive, the company makes a profit. When it is negative, it is a deficit.
Where the company is subject to income tax (IR) and carries on an activity of a kind commercial, industrial or handcrafted, income from this activity is taxed in the category of BIC: titleContent. If the activity is liberal, income is taxed in the category of NBC: titleContent.
The expenses must then be added to the resulting accounting result non-deductible from a tax point of view, we are talking about fiscal reintegration.
- Individual business Remuneration of the operator in a
- ‘Sumptuous’ expenditure ” is the cost of hunting or fishing. It also includes the purchase, maintenance or rental of residences, yachts and pleasure craft.
- Excess interest on current accounts of members
- Depreciation surplus for a passenger vehicle
- Taxes on the economic use of private vehicles (ex-TVS) where the business is subject to business tax (IS)
- Business tax (IS)
- Fines and penalties (e.g. traffic violations)
The 3e step consists of subtract of the accounting result on tax deductions (or extra-accounting). These are revenue recorded in the accounts but not taxable for tax purposes or previously taxed (recapture of provision reinstated in a previous fiscal year).
- Quota of losses of a business of persons
- Deferral of tax receivable
- Amount of the rebate or exemption for companies established in Urban Free Zones (UFAs), in Rural Revitalization Areas (RRZs), in Defense Restructuring Areas (DRAs), the urban areas to be dynamized (BUD), the employment pools to be revitalized (BER) or the young innovative companies (JEI).
- Capital gains on equity securities taxed at a rate other than the standard rate
- Depreciation of goodwill where it has been acquired between 1er January 2022 and December 31, 2025
The tax result is therefore obtained by the following formula:
Tax result = accounting income + tax reinstatement - tax deductions
It must be indicated in the tax book filed at the time of the income statement filed by the company subject to business tax (IS) or income tax in the Industrial and Commercial Benefits (BIC) or non-commercial profits (NBC).
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