What types of income are generally subject to corporate income tax?

Corporate income tax encompasses a wide range of income types, not limited just to business activities. Specifically, all types of income, including dividends and interest, are generally subject to corporate income tax. This broad treatment includes profits earned from ordinary business operations, as well as revenue generated from passive sources such as investment income, which includes dividends received from other corporations, interest earned on cash or investments, and capital gains from the sale of assets.

This comprehensive approach ensures that a corporation pays taxes on its total income regardless of the source. Ordinary revenue from business activities is indeed subject to corporate tax, but it is just one category of income. Similarly, while royalties and interest can be taxed, they are just part of the broader picture.

The misconception that only specific types of income, such as only dividends and capital gains, or only revenue from business activities, are taxable may arise from misunderstanding the scope of taxable income for corporations. Thus, recognizing that all forms of income, including passive investment income, are taxable is crucial for understanding corporate tax obligations.