Taxable Profit | Taxable Earnings
Definition: Taxable profit is the profit (or loss) upon which income taxes are payable. The composition of taxable profit varies by taxation authority, so it will vary depending upon the rules of the taxation authorities within which an entity is located or does business.
Taxable profit is primarily based on operating earnings, but other types of taxable earnings can come from:
- Dividend income
- Interest income
- Capital gains on the sale of long-term assets
Different tax rates may apply to the various types of taxable earnings. There may also be graduated tax rates that apply to different amounts of taxable profit.