​KembaraXtra – Legal Terms – Mutual Trading
​Mutual trading exists where the income of an organization comes entirely from contributions made by its own members.
The members are treated as both contributors and owners of the organization.
As a result, any financial surplus is not regarded as taxable profit in the ordinary sense but rather as an excess of members’ contributions.
This principle commonly applied to mutual societies, clubs, and certain insurance organizations.
The doctrine has important implications in tax law, particularly regarding liability for corporation tax.