Just throwing this one out there to test everyone: Can someone give me the formulas for Double Taxation Rate, and the Split Rate System?
I know double taxation rate would be corporate tax rate +(1-corporate tax rate) * individual tax rate I am not sure of split tax rate but I am guessing this rate would be the one where the tax is borne entirely by the individual (or is it the imputation tax system)
I don’t think you have to worry so much about formulas for this subject (rather concepts). Split rate is when a different rate is applied by the taxation regime to earnings that are to be distributed (lower) than earnings that are to be retained. I think Germany is an example of this. Imputation is when the corp tax applied to the earnings before distribution is reversed as part of the individual investor’s tax assessment.
the split rate calculation is sorta the same as the double taxation rate in Doublt Taxation - you have the corporate rate (same for retained earnings and for dividends) and the indivdiual rate. So the effective rate for the investor = Corporate Rate +(1-Corp Rate)*Ind Rate In Split rate - the corporation is taxed differently on their retained earnings versus dividends paid. So for exampl you might see something like Corporate Tax rate on retained Earnings - 40%, Corporate tax rate on dividends - 35%, Individual Tax Rate= 25% Effective Rate for the Investor in this case would be = .35 + (1 - .35 ) *.25