Comment by pjc50
6 months ago
Most businesses let you deduct inputs and capital expenses from your revenue so that tax only applies to profit.
Since this is done on annual buckets it's very common to try to move items in both columns between years to minimize tax.
So if company A pays company B to develop some software, that revenue for company B (or rather, its profit) is still taxable? Then it makes sense I guess.
The revenue minus expenses is taxable, yes. And if the business itself makes no money, that means all of it was taxed through payroll.