The Taxation of Co-Operatives’ Income: Analysis of Its Rationale

Key Points

Cooperatives receive a specific tax treatment that is distinct from companies, suggesting unique taxation principles.
The favorable tax relief-based tax regime for cooperatives is widespread in both Western Europe and North America.
Understanding what constitutes cooperative income for taxation purposes is crucial to analyzing tax benefits.
The tradition of granting cooperatives favorable tax treatment highlights a pattern in various countries' tax policies.

Abstract

In this paper we address the issue of taxation of cooperatives’ income. Cooperatives traditionallyreceive a specific tax treatment distinct from that given to companies. In general terms, thatspecific cooperative tax regime is apparently more favorable when compared to the one applied to companies. A tradition of granting cooperatives a favorable taxrelief-based tax regime is widely extended, being noticeable inall Western European Countriesandin the Northern American countries (USA and Canada). This paper seeks to lay down some conceptual basis on which the issue ought to beanalyzed, with aspecial emphasis on the definition of what is to be treated as cooperative income for tax purposes and the rationale for afavorable cooperative tax regime.

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Cite This Study

Nina Aguiar (Fri,) studied this question.

synapsesocial.com/papers/68d45e5831b076d99fa5e7f7 https://doi.org/https://doi.org/10.36128/gx9bd911

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