Churches Cannot Pay Corporate Taxes!

I am surprised at a common misconception that churches are supposed to pay corporate taxes. But I have observed that the misconception emanates from ignorance of taxation in accounting. That is why I want to explain taxation in accounting to dispute that fallacy as a brilliant accounting student!

Churches are non-profit organisations as per their registration so they are not required to pay corporate taxes. This is because they do not make profits like companies who engage in commercial activities to make profits. And churches prepare income and expenditure accounts not profit and loss accounts like all other non-profit organisations to arrive at surplus or deficit not profit or loss.

But churches now have sub-organisations being profit oriented which are required to pay corporate taxes, and not the church as a whole though their accounts show in the church's general accounts. However, all churches must pay capital gains tax, personal income tax, property rates etc. These are the tax obligations we must challenge churches to fulfill!

#Churches #Taxation #Accounting
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(Dated 16-04-15).
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