The tax on net income of companies is Corporation tax.

Explanation:
Corporation tax is a direct tax imposed on the net income of companies. It is one of the major sources of revenue for the government. This tax is levied on the profits earned by corporations or businesses during a financial year. Here is a detailed explanation of why corporation tax is the correct answer:

1. Definition of Corporation Tax:
Corporation tax is a tax levied on the net income of companies or corporations. It is imposed by the government to generate revenue and is calculated based on the profits earned by the company.

2. Applicability:
Corporation tax is applicable to all types of companies, including public limited companies, private limited companies, and foreign companies operating in a country. The tax rate may vary depending on the jurisdiction and the size of the company.

3. Calculation of Corporation Tax:
Corporation tax is calculated based on the net income or profits of a company. The net income is determined by deducting allowable expenses, such as salaries, rent, interest payments, and depreciation, from the gross income. The tax rate is applied to the net income to determine the amount of tax payable.

4. Importance of Corporation Tax:
Corporation tax is an essential source of revenue for the government. It helps fund public services, infrastructure development, and social welfare programs. The tax revenue generated from corporation tax contributes to the overall economic development of a country.

5. Tax Planning and Compliance:
Companies need to comply with tax laws and regulations related to corporation tax. They may engage in tax planning to minimize their tax liability by taking advantage of tax incentives, deductions, and exemptions provided by the government.

6. International Taxation:
Corporation tax also has implications for international taxation. Companies operating in multiple jurisdictions need to consider tax treaties, transfer pricing regulations, and other international tax rules to ensure compliance and avoid double taxation.

Overall, corporation tax is a significant component of the tax system and plays a crucial role in the economic development of a country by ensuring that companies contribute their fair share of taxes based on their profits.