Template-Type: ReDIF-Article 1.0
Author-Name: Ladislav MEJZLÍK
Author-Name: Leoš Vítek
Author-Name: Jana Roe
Title: Adjustments to Accounting Profit in Determination of the Income Tax Base: Evolution in the Czech Republic
Abstract: The article analyzes the main trends in income, tax base and tax deductions for Czech companies in years 1993 - 2012. After an initial survey of the problem, the article describes the issue of national accounting policy regulation in relation to IFRS and shows the evolution of main macroeconomic indicators of profitability and corporate taxation in the EU and the Czech Republic. The following part is based on data from the Ministry of Finance of the Czech Republic and monitors the development of corporate accounting profits, tax bases and tax deductions. All data collected for the purposes of this article were available only on an annual accrual basis as an aggregate; therefore it is not possible to draw any conclusions for any specific groups of companies or sectors. The concluding section summarizes the main findings of the paper and offers suggestions for further research.
Keywords: Czech Republic, IFRS, Tax base
Classification-JEL: H25, M41
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=127.pdf
File-URL: http://www.vse.cz/efaj/127
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Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:127
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Template-Type: ReDIF-Article 1.0
Author-Name: Jan MOLÍN
Author-Name: Simona JIRÁSKOVÁ
Title: Legal Consequences of the Determination of Corporate Income Tax Base Referring to IFRS
Abstract: This paper is concerned with certain legal consequences of the determination of corporate income tax base. The introductory part analyses the term tax, discusses the constitutional dimensions of taxation, and formulates requirements as to tax legislation. The subsequent part of the contribution discusses the structure of corporate income tax base of those taxpayers, which keep accounting records. Special emphasis is placed on the relationship of accounting revenues and income that is subject to tax. The topic is set in the context of Czech Supreme Administrative Court case law, as the Court has been previously concerned with the issue. Next, we explore the specifics of the determination of a tax base of those taxpayers that are accounting entities, preparing their statutory financial statements in compliance with International Financial Reporting Standards (IFRS).
Keywords: International Financial Reporting Standards, Tax base, Corporate income tax, Taxable income
Classification-JEL: H25, M48
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=128.pdf
File-URL: http://www.vse.cz/efaj/128
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Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:128
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Template-Type: ReDIF-Article 1.0
Author-Name: Petr Vácha
Title: Challenges in Auditing Income Taxes in the IFRS Environment: The Czech Republic Case
Abstract: This article looks at the complex and judgmental area of auditing income taxes in the environment of financial reporting in accordance with International Financial Reporting Standards as adopted by EU (IFRS) in the Czech Republic. In the first section, the main regulations that apply to entities preparing IFRS financial statements and their influence on income tax base are outlined. The second section summarizes the key steps in addressing risk of income tax misstatements when auditing financial statements. The third section discusses the specifics of auditing income taxes in the Czech environment and the alternative approaches the entities may adopt with respect to determining the profit before tax for tax purposes and challenges it represents for the auditor. This section also briefly notes some other aspects of income tax auditing such as challenges connected with the deferred tax, effective tax rate testing or using the auditor’s expert for the audit procedures. The conclusion suggests more detailed rules to be provided by the tax legislation with respect to ambiguities which current situation brings to both entities and their auditors.
Keywords: IFRS, Auditing, Income taxes
Classification-JEL: M42
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=129.pdf
File-URL: http://www.vse.cz/efaj/129
File-Format: text/html
Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:129
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Template-Type: ReDIF-Article 1.0
Author-Name: David Procházka
Title: The IFRS as Tax Base: Potential Impact on a Small Open Economy
Abstract: The IFRS adoption has improved the quality of accounting information significantly. However, huge costs are incurred by all subjects involved. The process has considerable consequences for tax systems, too. State authorities are solving how to ensure the control over tax duty fulfilment under a new financial reporting system. As corporate income tax systems in code law countries are tightly bound up with accounting regulation, governments are forced to decide whether and in which way companies preparing financial statements under the IFRS shall reflect the IFRS based figures in their income tax returns. The paper focuses on specifics of a small open economy, such as the Czech Republic. Four cardinal research issues are identified, if the eligibility of the IFRS as a tax base is ruminated on. Three issues are already assessed with the reference to publicly available data; the last one needs further scrutiny, as non-public data from tax returns are needed for the analysis.
Keywords: IFRS, Taxation, Small open economy
Classification-JEL: H25, M41
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=130.pdf
File-URL: http://www.vse.cz/efaj/130
File-Format: text/html
Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:130
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Template-Type: ReDIF-Article 1.0
Author-Name: Miloš Tumpach
Author-Name: Adriana Stanková
Title: Current Income Tax Disclosures in Separate Financial Statements of IFRS Adopters in Slovakia
Abstract: As a direct result of the accession into EU, IFRSs have been introduced in Slovakia as a framework for compilation of separate financial statements of various businesses since 2006. Because of traditionally strong ties between accounting and tax regulation, taxpayers and tax authorities were exposed to an unprecedented situation. Consequently, national parliament and the government have tried to address major identified issues. Apparently, two underlying principles have been established for carrying out these initiatives - to comply with the Regulation No. 1606/2002 and to keep the tax burden at the same level. Still, there is serious concern about the effectiveness of the measures adopted, as there are at least three approaches for determination of income taxes of IFRS adopters in Slovakia. Because the relevance of accounting information is partially driven by their ability to predict future order and results of events, our paper is focused on the assessment of the disclosures related to current income tax determination, presented in the separate financial statements of the said companies. Though lack of such information decrease the relevance of financial statements, it is quite commonplace. Additionally, we have found traces of boilerplate disclosures (i. e. likely wordings presented in financial statements of different companies).
Keywords: IFRS, Taxation, Slovakia
Classification-JEL: H25, M41, M48
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=131.pdf
File-URL: http://www.vse.cz/efaj/131
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Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:131
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Template-Type: ReDIF-Article 1.0
Author-Name: Jana Roe
Title: Transition from US GAAP to IFRS: Analysis of Impact on Income Tax Administration in USA
Abstract: When SEC and FASB started considering replacing US GAAP with IFRS, the impact of this change had to be considered by the various stakeholders in the financial reporting process in the U.S., including the various preparers and users of financial statements, including the Tax Administration, IRS. Since 2009, taxpayers in the U.S. are allowed to use IFRS as a starting point for reconciliation of book results to taxable income or loss, an option utilized by approximately 200 companies in that year. In 2010, TIGTA issued a report describing the state of preparedness for the potential transition from US GAAP to IFRS, outlining activities such as education of field agents, technical analysis of the potential impact of changes to financial reporting standards, consultation of current issues related to IFRS with taxpayers and preparers. Specific technical tax issues related to transition from US GAAP to IFRS include LIFO, leasing, component depreciation, and uncertain tax positions; non-technical tax issues related to IFRS adoption include taxpayer and agent education, regulatory adjustments, developing new audit strategies. In addition to federal tax considerations, state tax authorities and taxpayers are preparing for the impact of IFRS adoption on state and local tax administration, impacting issues such as sales, property, and payroll apportionment and equity-based taxes. The main research questions relate to empirical research related to the micro and macro economic impact of the transition from US GAAP to IFRS.
Keywords: IFRS, US GAAP, Tax administration, IRS, TIGTA, LIFO, Financial reporting standards
Classification-JEL: H25, M41
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=132.pdf
File-URL: http://www.vse.cz/efaj/132
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Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:132
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Template-Type: ReDIF-Article 1.0
Author-Name: Libor VAŠEK
Author-Name: Tereza Gluzová
Title: Can a New Concept of Control under IFRS Have an Impact on a CCCTB?
Abstract: In May 2011, new standards of the IFRS regarding concept of control and related enhanced disclosure requirements were issued. These new standards have being mandatory effective since reporting period beginning on 1 January 2013 except for countries within European Union where effectiveness begun on 1 January 2014, one year later than official date approved by the IASB. An adoption of the new standards has raised lots of questions whether a scope of a consolidation will be changed based on a new concept of the control (whether more or less entities will be consolidated). The paper provides an analysis of expectations that result from financial statements of companies traded on the Prague Stock Exchange. Together with this analysis the paper discussed an issue if a change of control concept in the IFRS can affect a use of the Common Consolidated Corporate Tax Base, which has been a great topic within the European Union. In 2011 the European Commission issued the Proposal for a Council Directive on a CCCTB and established a draft of rules how to consolidate companies within the EU for the tax purposes. Can the tax approach based on the CCCTB be affected by a change in the IFRS such as a change in the concept of control?
Keywords: IFRS, Concept of Control, CCCTB, Income Taxation
Classification-JEL: H25, M41
Volume: 2014
Issue: 4
Year: 2014
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=133.pdf
File-URL: http://www.vse.cz/efaj/133
File-Format: text/html
Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:4:id:133
X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/133