This isn't about some exact country, it's more about the general idea (which, I believe, is very similar in most of the world). But if you need some context, let's say that we're talking about a Limited Liability Company in the Netherlands (i.e. BV in Dutch).
Some company sold goods worth €100k, it did spend €10k on day-to-day stuff (like office rent, website hosting) and its employees expect €30k to be paid as salaries. Shareholders will distribute all the profits as dividends.
So, how are all the (major/common) taxes applied? In what order and on what portions are they calculated?
If we assume corporate tax of 25%, dividend tax of 15%, personal income tax of 40% and VAT of 20%, then is the following calculation correct?
For VAT we take the entire revenue: 100000 * 0.2 = 20000
This amount is subtracted from the revenue, which leaves us with €80k.
Then we must also subtract all the salaries: 80000 - 30000 = 50000
Company also withholds personal income taxes (and other minor stuff, like social security and pension contributions) from those 30000, so that employees get only a fraction of that sum.
And also we subtract the day-to-day operation costs: 50000 - 10000 = 40000
This remainder is taxed using the corporate tax: 40000 * 0.25 = 10000
Now we subtract that as well and this way we get the profit, right? 40000 - 10000 = 30000
And then, just for the distribution of that money, the company pays again, but now the dividend tax? 30000 * 0.15 = 4500
And this remaining €25.5k is what is distributed among the shareholders.
If, for the sake of simplicity, we have just one, which holds 100% of the shares, then it all goes to that shareholder, which in turn will pay personal income tax on that money: 25500 * 0.4 = 10200
So in the end the take-home for this shareholder will be: 25500 - 10200 = 15300
Is the idea of this calculation correct?