TABLE OF CONTENTS

CONTENT ........................................................................................................... i

LIST OF TABLES ............................................................................................ iii

LIST OF FIGURES .......................................................................................... iv

CHAPTER 1 INTRODUCTION .................................................................... 1

1.1.BACKGROUND OF STUDY .................................................. 1

1.2. PROBLEM IDENTIFICATION.............................................. 3

1.3. SCOPE OF STUDY................................................................. 3

1.4. OBJECTIVE STUDY .............................................................. 4

1.5. BENEFIT OF STUDY............................................................. 4

1.6. THEORITICAL FRAMEWORK ............................................ 6

1.7. SYSTEM OF WRITING ......................................................... 8

CHAPTER 2 THEORITICAL BACKGROUND ....................................... 10

2.1. TAXATION ........................................................................... 10

2.1.1. FUNCTION OF TAX .................................................. 11

2.1.2. TAX DIFFERENTIATION ......................................... 12

2.1.3. TYPE OF TAX ............................................................ 13

2.1.4. PROCEDURE IN COLLECTING TAX ..................... 14

2.1.5 TAX RATE ................................................................... 15

2.1.6 TAX ASSESMENT SYSTEM ..................................... 16

2.2. INCOME TAX ...................................................................... 17

2.3. TAXABLE PERSON ............................................................ 17

2.4. TAXABLE OBJECT ............................................................. 19

2.5. NON-TAXABLE OBJECT ................................................... 21

 2.6. DEFINITION OF COST AND EXPENSES ......................... 24

2.6.1. BASED ON FINANCIAL ACCOUNTING STANDARD 24

2.6.2. BASED ON TAX PROVISION ...................................... 24

2.6.3. DEDUCTIBLE EXPENSES ....................................... 25

2.6.4. NON-DEDUCTIBLE EXPENSES ............................. 29

2.7. FINANCIAL STATEMENT ................................................. 31

2.7.1. COMMERCIAL INCOME STATEMENT ................. 32

2.7.2. FISCAL INCOME STATEMENT .............................. 33

2.8. FISCAL RECONCILIATION ............................................... 34

2.9. FISCAL CORRECTION ....................................................... 35

2.9.1. POSITIVE CORRECTION ......................................... 35

2.9.2. NEGATIVE CORRECTION ....................................... 36

2.10. PERMANENT AND TIME DIFFERENT .......................... 37

2.11. STEP IN FISCAL RECONCILIATION ............................. 38

2.12. SAMPLE OF FISCAL RECONCILIATION ...................... 39

2.13. CALCULATION OF INCOME TAXPAYABLE .............. 41

2.14. IMPACT OF FISCAL RECONCILIATION ....................... 42

2.15. TAX CREDIT IN INCOME TAXPAYABLE .................... 42

2.16. FINAL INCOME TAX ........................................................ 44

CHAPTER 3 RESEARCH METHODOLOGY .......................................... 45

3.1. RESEARCH DESIGN ........................................................... 45

3.2. DATA COLLECTION METHODS ...................................... 45

3.3. DATA ANALYSIS METHODS............................................ 46

LIST OF REFERENCES
 LIST OF TABLES

Table 2.1 Progressive Rate .............................................................................. 15

Table 2.2 Depreciation Rate ............................................................................ 27

Table 2.3 Amortization Rate ........................................................................... 28

Table 2.4 Example of Fiscal Reconciliation XYZ, CO .................................. 40

Table 2.5 Calculation of Income Tax Payable by XYZ, CO ........................ 41

 LIST OF FIGURES

Figure 1.1 Reconciliation of Commercial Income Statement to Fiscal Income

Statement ......................................................................................................... 15