Taxation in Accounting

Joaquim Miranda Sarmento
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Joaquim Miranda Sarmento: Universidade de Lisboa

Chapter 4 in Taxation in Finance and Accounting, 2023, pp 75-85 from Springer

Abstract: Abstract Taxes are a substantial and relevant part of accounting. They impact on the balance sheet as assets and liabilities. They can be assets if there is a refund of taxes and if the firm has deferred tax assets. They can be a liability concerning taxes that are already assessed but need to be paid the following year (i.e., they are a liability, but there was no failure in terms of tax compliance) and as taxes that surpass the payment limit (i.e., the firm failed in terms of the tax compliance). They also impact on the P&L, as taxes can be a cost or, in the case of corporate tax, they are subtracted from pre-tax profits (EBT) in the calculation of post-tax profits (net income). In this chapter, we analyze the main concepts, the impact of taxes on the balance sheet and P&L, how to account for corporate tax and VAT, and also the issue of deferred tax assets.

Date: 2023
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DOI: 10.1007/978-3-031-22097-5_4

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