Government Finance Statistics Manual 2014

92 Government Finance Statistics Manual 2014

corporations that become payable during the

current reporting period, irrespective of the pe-

riods over which the gains have accrued. Th ey

are usually payable on nominal, rather than real,

capital gains and on realized, rather than unreal-

ized, capital gains.

• Taxes on winnings from lotteries or gambling—
  Th ese are taxes payable on the amounts receiv-
  able by winners. Th ey do not include taxes on the
  turnover of producers that organize gambling or
  lotteries, which are recorded as taxes on goods
  and services.
  5.42 Taxes on income, profi ts, and capital gains
  are attributed as being payable by either individuals
  (1111) or corporations and other enterprises (1112).
  Th ese individuals, corporations, and other enter-
  prises may be resident or nonresident institutional
  units. Taxes on income, profi ts, and capital gains
  are classifi ed as other taxes on income, profi ts, and
  capital gains (1113) when these taxes are payable
  by general government units, or when informa-
  tion needed to determine whether taxes should be
  attributed to individuals, corporations, or general
  government units is not available. In the event that
  general government units are subject to this tax cat-
  egory, these taxes should be classifi ed under this cat-
  egory, identifi able according to the subsector of the
  taxpayer to allow for consolidation (see paragraphs
  6.122–6.123). Similarly, taxes payable by public cor-
  porations are subject to consolidation and should
  be identifi ed as a subcategory of taxes payable by
  corporations (see Table 5.2). Income taxes on trusts,

estates, capital gains, or winnings from lotteries and

gambling may fall under income taxes payable by in-

dividuals (1111), payable by corporations and other

enterprises (1112), or other taxes on income, profi ts,

and capital gains (1113), depending on the insti-

tutional unit that benefi ted from the income (see

paragraph 5.41). Income taxes payable by nonprofi t

institutions serving households or corporations are

recorded as taxes on corporations. Th ese taxes may

be levied on actual or presumed income and prof-

its, and usually only on realized capital gains. Th e

amount of income subject to tax is usually less than

gross income because various deductions are per-

mitted. A profi ts tax is levied on revenue minus al-

lowable deductions.

5.43 When using the accrual basis of recording,

income taxes are normally imposed on the income

earned during an entire year. In the absence of high-

frequency source data, indicators of seasonal activity

or other appropriate indicators may be used to al-

locate the annual totals when monthly or quarterly

statistics are compiled. When using the cash basis of

recording, income taxes are recorded when the tax

payment is received.

5.44 Under imputation systems of corporate in-

come tax, shareholders are wholly or partially re-

lieved of their liability for an income tax on dividends

paid by the corporation out of income or profi ts liable

to corporate income tax. Th e relief is usually called

a tax credit, although it actually is a means of allo-

cating a tax among taxpayers. If the relief exceeds a

shareholder’s total tax liability, the excess may be pay-

able to the shareholder. Because this “tax credit” is

an integral part of the imputation system of corpo-

rate income tax, any net payment to shareholders is

recorded as a negative tax rather than expense. Th is

treatment diff ers from the general treatment of tax

credits described in paragraph 5.29. Th e total tax paid

by the corporation is attributed to corporations and

other enterprises (1112). Th e associated tax credit is

for the benefi t of the shareholders.

Taxes on payroll and workforce (112)

5.45 Taxes on payroll or workforce (112) are taxes

payable by enterprises assessed either as a proportion

of the wages and salaries paid or as a fi xed amount per

person employed. Th ey do not include:

Table 5.2 Detailed Classifi cation of Taxes on

Income, Profi ts, and Capital Gains (111)

111 Taxes on income, profi ts, and capital gains

1111 Payable by individuals

1112 Payable by corporations and other

enterprises1,2

1113 Other taxes on income, profi ts, and capital

gains

11131 Payable by general government1,2

11132 Unallocable taxes on income, profi ts, and

capital gains

(^1) Further breakdown/“of which” lines could allow for the identifi -
cation of subsectors and individual units (see Table 3.1).
(^2) Further breakdown/“of which” lines could allow for the iden-
tifi cation of those taxes related to specifi c natural resources or
environmental taxes.