An organization that does not pay income tax on its profits but passes them through to its owners who pay the tax at their indiv

Question

Harman [31]

3 years ago

15

An organization that does not pay income tax on its profits but passes them through to its owners who pay the tax at their indiv

idual rates is called a

Social Studies

1 answer:

Juli2301 [7.4K] · Answer 1 · 2022-08-17T12:08:36+03:00

Answer:

Flow-through tax entity

Explanation:

Flow-through tax entity does not record the income from its yearly operation as its net income. This type of organization direct directed those income to the owners, so the taxation laws that applicable for those income is the tax laws for individuals rather than business establishments.

Almost all countries allow this practice, but To prevent frauds, they usually required to file an annual return reporting the shares of income allocated to owners,