Dear Group members
Please advice me on the following
Does the company need to prepare the income statement, even if it has not yet started its main operation ?
Thanking you in advance
Message from Jeroen
Yes, absolutely! it’s one of the primary statements. All your incurred costs must be shown in the P&L.
Message from Edgar
Further to that, for the purpose of Corporate Income Tax (CIT), as a result of no operations performed, and no income realised, there is a loss, thus no impact for paying CIT.
As to what level of CIT to pay in this case, this depends broadly on tax dispositions depending on each country’s tax system. Some country allow a non- activity company to pay minimum non-activity CIT, some other not…..
Whatever the specificity of each country, an income statement is and remains a fair pciture of expenses incurred, unless this have to be capitalised based and not expenses depending on a specific legislation.
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