Lesson 1Corporate tax rate system, tax calculation process, and advance tax paymentsDescribes the standard Eritrean corporate tax rate, methods to figure taxable income from accounting income, apply credits, and find liability, then discusses advance tax safe limits, due dates, and cash planning for companies.
Overview of the flat corporate tax rate in EritreaCalculating taxable income from accounting recordsUsing credits and other tax cutsYearly tax liability and refund methodsAdvance tax safe limits and levelsQuarterly advance payment datesLesson 2Advance tax payment methods and fines for companies (Form timing and submissions)Explains how companies in Eritrea calculate and pay advance taxes, form submission deadlines, extension options, and how fines for underpayment and interest are figured, including yearly income installment approaches.
Who needs to pay company advance taxesQuarterly installment calculation waysYearly income and seasonal business handlingForm due dates and extensionsUnderpayment fine and interest rulesWays to avoid fines and get reliefLesson 3Tax handling of grants and government aid (taxable income vs. exclusion options)Looks at tax treatment of grants, forgivable loans, and other government support in Eritrea, separating taxable income from exclusions, recognition timing, and reporting needs for national and local programs.
Kinds of grants and incentive schemesIncluding in taxable income vs. excludingForgivable loans and debt cancellationTiming of income recognition pointsAccounting-tax differences for aidReporting and information issuesLesson 4Regular and essential business deductions with proof needsDiscusses what counts as a regular and essential business cost under Eritrean tax law, proof standards, support for travel, meals, and home office, and building files ready for audits to back company deductions.
Standard for regular and essential under tax lawFair pay and related party rulesProof for travel, meals, and entertainmentHome office and mixed-use cost sharingRecord systems and digital proofAudit risks for common deductionsLesson 5Extra depreciation rules, percentage steps, qualified asset definitionsCovers eligibility for extra depreciation in Eritrea, yearly percentages, qualified asset types, step-down schedule, and how extra works with other expensing and depreciation in company tax planning.
Qualified assets and in-use testsExtra depreciation percentage stepsUsed assets and related party limitsLinking with expensing rulesInteraction with standard depreciation methodsStrategic timing for capital spendingLesson 6Handling business receipts: revenue recognition for software services and delayed revenue problemsExplains tax rules for recognizing business receipts in Eritrea, focusing on software services and subscriptions, advance payments, delayed revenue, and how tax methods may differ from accounting while staying compliant.
Cash vs. accrual tax accounting waysAdvance payments and delay choicesSoftware subscriptions and long contractsSharing revenue in bundled dealsDelayed revenue and tax timing problemsContract changes and renewalsLesson 7Expensing rules and limits: eligibility and link with extra depreciationDiscusses expensing eligibility in Eritrea, dollar limits, phase-outs, and asset types, then explains how it links with extra depreciation and standard methods, including order rules and planning tips.
Eligible expensing asset typesYearly dollar limits and phase-out rulesTaxable income limit and carryoversOrder with extra and standard depreciationExpensing for vehicles and special assetsPlanning choices for small businessesLesson 8Research and development tax credits: qualified research costs, proof, calculation waysExamines eligibility for R&D credits in Eritrea, defining qualified research costs, handling of wages and supplies, proof standards, and calculation methods, including standard and simple credit ways for companies.
Four-part test for qualified researchFinding and tracking research wagesSupplies, contract research, and softwareStandard credit vs. simple methodNeeded project-level proofLink with capitalization rulesLesson 9Taxable income vs. accounting income: lasting and temporary differencesExplains why taxable income differs from accounting income in Eritrea, covering lasting differences like fines and tax-free interest, temporary differences from timing, and how deferred tax items arise.
Common lasting difference examplesTemporary differences and timing changesBasics of deferred tax assets and liabilitiesValuation reserves and realizabilityReconciliation schedulesEffect on effective tax rate reportingLesson 10National payroll tax duties, employer responsibilities, and reporting (Forms 941, 940, W-2)Outlines national payroll tax duties for employers in Eritrea, including social security and unemployment bases and rates, deposit schedules, and completing forms for company employees.
Employer and employee social security partsUnemployment coverage, wage base, and creditsPayroll tax deposit schedules and waysQuarterly reporting detailsYearly unemployment reconciliationPreparation and corrections of wage formsLesson 11Net operating losses, carrybacks/forwards, and limits (Tax law changes)Reviews net operating loss rules for companies in Eritrea, including recent changes, carryforward periods, the 80% limit, and how losses affect advance taxes, modeling, and financial statements.
Defining and calculating a net lossOld and new loss systemsCarryforwards and 80% limit rulesLink with creditsLosses in advance tax calculationsFinancial statement and reporting effectsLesson 12Depreciation and amortization basics: standard methods, useful lives, and half-year ruleIntroduces depreciation and amortization for tax in Eritrea, focusing on asset classes, recovery periods, rules, and methods, plus amortization of intangibles and differences from accounting depreciation.
Asset classes and recovery periodsHalf-year, mid-quarter, and mid-month rulesStandard vs. alternative depreciationTax amortization of intangiblesAccounting vs. tax depreciation differencesFixed asset records and proof
