Corporate tax, also called corporation tax or corporate income tax, is charged on the profits of incorporated companies. Profit here means revenue minus deductible business costs such as salaries, rent, depreciation and interest, so the tax lands on the net result rather than turnover.
Headline rates vary widely. The United States levies a flat 21% federal rate, with many states adding more on top. The United Kingdom charges 25% for larger companies and a reduced 19% small-profits rate. Italy applies IRES at 24% alongside a regional IRAP charge, Germany combines a federal rate with a trade tax that pushes the effective burden toward 30%, and France uses a standard 25% rate. Ireland remains famous for its 12.5% trading rate.
Suppose a company books 200,000 in revenue and 120,000 in deductible costs, leaving 80,000 of profit. At a 25% rate the corporate tax due is 20,000. If those profits are later paid out to owners, they may face withholding tax and personal tax on the dividend, a layering often described as double taxation.
Corporate tax differs from self-employment tax, which applies to unincorporated owners. To compare regimes side by side, try the compare taxes by country calculator.