Produced by Tolley in association with Malcolm Greenbaum
  • 23 Mar 2022 10:45

The following Corporation Tax guidance note Produced by Tolley in association with Malcolm Greenbaum provides comprehensive and up to date tax information covering:

  • IFRS introduction
  • Scope of IAS 12
  • Current tax
  • Deferred tax
  • When tax charge is recognised outside of profit and loss
  • Uncertain tax positions (UTPs) and tax exposures under IFRS
  • IFRIC 23 ― uncertainty over income tax treatments
  • Discounting deferred tax

IFRS introduction

Reporting of income taxes under IFRS is subject to the accounting standard IAS 12. Access to an ‘unaccompanied’ version of IAS 12 is currently available by registering here from the IAS 12 summary page. Full access to the standards is only available by subscription to the IFRS Foundation, although this may be possible via your professional institute by subscription, which is often cheaper.

The version of IFRS used in the UK has been IFRS as endorsed by the EU. From 1 January 2021, UK-endorsed IFRS must be used. This is identical to EU-endorsed IFRS as at that date, but may change subsequently as the UK decides to possibly not endorse parts of past or future IFRS.

Scope of IAS 12

According to IAS 12, para 2:

‘income taxes include all domestic and foreign taxes which are based on taxable profits. Income taxes also include taxes, such as withholding taxes, which are payable by a subsidiary, associate or joint venture on distributions to the reporting entity.’

The IASB has intentionally not published guidance on which specific taxes fall within this definition. It is important to determine whether specific taxes that a company pays are income taxes or not because:

  1. only income taxes can be reported within the tax line in the income statement. Other taxes are reported elsewhere in the income statement, for example, in cost of sales or administrative expenses.

  2. deferred taxes can only be calculated based on the rules within IAS 12 if the tax in question is an income tax

From a

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