The tax year coincides with the calendar year, except when trading operations begin or when a company goes into liquidation or is merged during the course of a calendar year. Within three months after the end of its tax year, a company must file a corporate income tax return showing its taxable profits and tax liability, as well as base earnings for employee statutory profit-sharing purposes and the actual amount of the profit-sharing payments.

Generally, the corporate income tax due is determined by self-assessment. However, the tax authorities may make an assessment when a return is not filed, the taxpayer impedes the tax authorities, or the taxpayer fails to keep proper accounting records. The tax authorities may estimate the value of assets subject to tax. They also may charge companies with excess tax determined from their review of the tax returns or performance of direct audits or from the accountants' tax reports. In such a case, the tax authorities determine and notify the company of tax underpayments, surcharges, and fines resulting from the tax review or audit.

During each tax year, a company must usually make monthly provisional payments of tax on account of its annual tax liability. The balance of corporate income tax owed must be paid within three months following the close of the tax year, at the same time as the tax return is due. The provisional payments are calculated by applying a factor to gross income of the current year and computing tax at the current corporate income tax rate on the resulting amount. A company may request a reduction in its provisional payments if it believes the payments will exceed the annual tax to be charged.

If taxes are not paid within prescribed time limits, the amount payable is adjusted by the inflation factor for the period starting with the month prior to that in which payment should have been made and ending with the month prior to that in which payment is made. In addition, surcharges must be paid on extensions or partial payments or on overdue or untimely payments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Deirdre Silberstein, Deloitte & Touche, Washington on +1 202 955 4000 or enter a text search 'Deloitte & Touche' and 'Business Monitor'.