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Notebook Lesson XL by Slidesgo

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10 views

Notebook Lesson XL by Slidesgo

Uploaded by

adilalistiafla
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Calculating Tax

Expense Tacation
Planning

Here starts
the lesson!
Main
characteristics

Adila Listia F Sri Cahyani


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Ratu Uswatun
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231091200121
Table of
Contents!
Taxation Expense
Calculating Tax
1. Definition and Components
2. Calculation of Current Tax
Expense
3. Deferred Tax 1. Calculting Taxable Income
4. Presentation in Financial 2. Determining the Tax Rate
Statements 3. Calculating Tax Expense
5. Disclosure 4. Considering Deferred Taxes
6. Other Considerations
Income Tax or
Taxation
Expense

Income tax or taxation expense


is a burden imposed by the
government on the profits
earned by companies or
individuals. In the context of
accounting, taxation expense
reflects the amount of tax that
must be paid based on taxable
profit in a certain period.
01
Taxation
Expense
1.Definition
and
Components

Curren Deferred
t Tax Tax

Tax calculated based on Tax recognized due to


current taxable profit temporary differences
between taxable profit and
accounting profit that will
reverse in future periods
The process
involves
2.Calculati
on of Calculating total
Current income

Tax
Reducing thet income by
allowable expenses to
The calcu obtain taxable profit
lation of
current ta
x is
based on
the
applicable
tax
rate and
taxable
profit Multiplying taxable profit
by the applicable tax rate
to determine current tax
3.Defereed Tax
Differences in the
recognition of income and
expenses between
accounting and tax rules
Defereed tax arises from temporary
difference between accounting profit
Different depreciation
and taxable profit, causing tax
methods for fixed assets
imposed on accounting profit to between accounting and
differ from tax paid. tax

Different recognition of
provisions and reserves
4.Presentation
in Financial
Statements
Taxation expense is presented in
the income statement as an
expense, reducing pre-tax profit to
obtain after-tax profit Futher details
are usually included in the notes to
the financial statements.
5.Disclosure Applicable tax
rates

Reconciliation
betweenn accounting
profit and taxable
profit
Companie
s must
disclose in
formation
about the
compone
of curren nts
t tax and Details of temporary
deferred
tax in the differences and the
notes to
the finan
statemen
t
cial basic for recognizing
deffered tax
6.Other Considerations
Tax Companies often
engage in tax planning
Planning to legally minimize the
tax payable
Strategies
Changes in tax regulations
Other
Considerati Regulator can affect the calculation
and recognition of taxation
ons y Changes expense

Internatio For multinational


companies, tax calculation
nal can be more complex as it
Aspects involves various juridictions
with different regulations
Calculati
ng Tax
Expense
Calculating tax
expense is a crucial
process in corporate
acconting and
financial
management. The tax
expense reflects the
tax liability that
company must pay
based on its taxable Book
Title.
P52

income over a certain


periode
1. Calculting
Taxable Income
• Gross Income : Sum up all the
income earned by the company.
• Tax Deductions : Subtract
Taxable income is the allowable deductions from the
income earned by the gross income, such as operationa
costs, depreciation, amortization,
company that can be and other tax deductions
taxed after deducting • Taxable Income : The result is the
taxable income used to calculate
allowable tax the tax
deductions
2.Determini
ng the Tax
Rate
The tax rate is the percentage
used to calculate the amount of
tax to be paid. The tax rate can
very depending on the tax
jurisdiction and type of income.
3.
Calculating
Tax Expense

to
the a pp li c able tax rate
Use
the tax expense from
calculate
income:
the taxable
se =
Tax Expen Rate
x ab le Income x Tax
Ta
4.
Considerin
g Deferred
Taxes
Besides current taxes,
companies may also need to
account for deferred taxes,
which arise from timing
differences between income
and expense recognition for
accounting and tax purposes.
Example Calculation
Suppose a company has a gross Taxable
income of Rp. 1.000.000 and Income
operational costs of Rp. 200.000 Taxable Income =
the Company’s tax rate is 30%. Gross Income-Operational Costs

Tax
Expense
Tax Expense =
Taxable Income X Tax Rate
Deferred Tax

If the company has temporary


difference, such as different
depreciation for tax and financial The deferred tax
reporting purpose, they need to
calculate deferred taxes. Suppose calculation should be
the depreciation for tax puposes is written as follows :
Rp. 50.000 and for financial
reporting is Rp. 40.000 resulting in Deferred Tax = Rp.10.000 x 30%
a temporary difference of Rp. = Rp. 3.000
10.000. If the tax rate remains at
30% the deferred tax is
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