Tax Implication and Corporate Tax Analysis

RUNNING HEAD: Tax implication and corporate tax analysis
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Name of the student-
Topic- Tax implication and corporate tax analysis
University name

Tax implication and corporate tax analysis
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Table of Contents
Introduction............................................................................................................... 3
Answer to question-1................................................................................................... 3
Answer to question-2................................................................................................... 4
Answer to question no-3............................................................................................... 5
Answer to question no-4............................................................................................... 6
Answer to question no-5............................................................................................... 7
Answer to question no-6............................................................................................... 8
Answer to question no-7............................................................................................... 9
Conclusion........................................................................................................... 11
References........................................................................................................... 12
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Tax implication and corporate tax analysis
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Introduction
In this report, income tax provisions and rules of corporate bodies have been taken
into consideration. This report is prepared on the Woolworths company which has charged
income tax and prepared its financial statements as per the income tax rules and regulations.
Answer to question-1
After evaluating the annual report of company, it is evaluated that equity capital of company
is accompanied with the three main parts namely, contributed capital, retained earnings and
reserve of company. The equity capital of Woolworths Company is accompanied with the
following parts.
Woolworths Company has divided its equity capital into following parts
 Common Stock
 Other Accumulated profit
 Retained earnings or distributable profit
Contributed capital of company- It is the amount of capital invested by company for the
consideration of the ownership they take from the company (Woolworths Company, 2017).
Retained earnings- It is the amount of profit collected by the company from its earned
profit. It is the plugged back by company or distributed to its equity shareholders
(Woolworths, 2017).

Tax implication and corporate tax analysis
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Equity (Amount in dollar
million) ($M)
2017 2016
Common stock 5615 5252
Retained earning 3797 3125
Total equity 114 94
Discussion of equity part of the company
It is observed that Woolworths Company has increased its equity capital and retained earning
throughout the time. It is a good indicator for company. However, accumulated earning has
also increased throughout the time. Total equity capital of company has increased by 12% in
2017 as compared to last year data (Woolworths Company, 2017).
Answer to question-2
Income tax expense is the amount of money which is needed to be paid by company
on its earning to government. It is shown as charged on the profit in the books of account of
company. It is observed that company has been paying high amount of taxes to government
on its profit. Therefore, it requires implementing effective tax planning to reduce the tax
payment (Woolworths Company, 2017).
Particular(AUD $ in million) 2016 2017
Income tax expenses 520 650