Fundamentals of taxation

Abstract

Through this chapter, the readers will understand the importance of taxation and its role in the company’s life. The chapter also enumerates the factors influencing taxation and shows how different types of taxes impact taxpayers. The differences between accounting and tax reporting are explained by underlying their purposes and illustrating some of the circumstances when the taxable profit is different from the accounting profit. A special section is dedicated to explaining and demonstrating tax evasion and tax avoidance, to show the differences between these two, to help readers understand the risks associated with tax avoidance and to emphasize the need for an ethical and professional approach when dealing with taxes. In the end, the reader finds summary questions to help drawing conclusions and quizzes, aiming to synthetize the main aspects covered throughout the chapter.