Corporate Income Tax (CIT) applies to the net income of incorporated companies, which are treated as separate legal entities from their shareholders under company law. This separate status means a corporation owns its own assets, incurs its own liabilities, and pays taxes on its own profits. Shareholders are only liable for the company’s debts up to the value of their shares, and they pay personal income tax separately on any dividends distributed to them.

A company’s residency status determines its overall tax exposure within a jurisdiction. Resident companies are generally taxed on their worldwide income, while non-resident companies are only taxed on income sourced within the country. A corporation is deemed a tax resident if it meets specific statutory tests:

Tax authorities apply different flat rate percentages to corporate net profits based on residency and sector classifications:

[ Resident Company ] ---------> Standard flat rate (e.g., 30% on net taxable profits)
[ Non-Resident / Branch ] ----> Higher flat rate (e.g., 37.5% on branch profits)
[ Preferential Sectors ] -----> Lower specialized rates (e.g., 15% for designated