Answer to Question #115532 in Accounting for Becky sylvanus

Question

Calculate the tax liability of a company with a turnover of 900,000 adjusted profit of 200,000 with a capital allowance of 110,000

Answer 1

Tax liability is the total amount of tax debt owed by an individual, corporation, or other entity to a taxing authority. In other words, it is the total amount of tax you're responsible for paying to the taxman. Tax liabilities are incurred when income is earned, there is a gain on the sale of an asset, or another taxable event occurs. No tax liability means a taxpayer's total tax was zero in the prior year, or they did not have to file a tax return.

tax liability=income (or sales, or capital)*tax rate