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A company takes in money from products and services it sells. From this amount of money the company pays employees and equipment, services, etc. for the runnin
by skh 8y ago
A company takes in money from products and services it sells. From this amount of money the company pays employees and equipment, services, etc. for the running of the company. These are called expenses in business accounting. The company does not pay tax on the money it took in that it then spent buying/paying for things. This is what is meant by the phrase, "companies don't pay tax on expenses".
- manquer 8y agoYou pay the tax on your expenses even if you have zero income . I am not talking about the tax you charge on your product and collect on behalf of the government. I am talking about the tax you pay for stuff you consume as a company. While you may be able to offset some of the taxes you have paid already against what you collect from the customer like in Value Added Tax, you still pay those taxes on your consumption even if there are no customers.
- skh 8y agoI defined the meaning of the phrase "businesses don't pay tax on expenses". My posts have only to do with the meaning I defined. My posts have nothing to do with what you are talking about.