We will indicate below the applicable NIFs in terms of tax registration, as well as other details about the deferred tax registry, tax provisions and current tax.
Deferred taxes are set when the economic entity anticipates or delays the payment of any contribution , which causes a discrepancy between tax law and accounting technique , this is only possible when the entity can reasonably prove that in the future it may reverse said deferral, either for the generation of profits , the amortization of losses or the crediting (application) of tax credits that are legally compensable.
For these cases, the CINIF issued the Financial Reporting Standard (NIF) D-4 “Income Taxes” , whose entry into force applies for years that began as of January 1 , 2008.
Said norm establishes the rules that must be observed for the recognition of income taxes , and defines particular valuation, presentation and disclosure standards for the accounting recognition of taxes on profits , whether they are caused and deferred, or accrued during the year. accounting period.
Regarding the international standard is IAS 12 , which is responsible for establishing the accounting treatment of income taxes, considering that this term includes all taxes, domestic and foreign, related to the taxable profits.
Some concepts that serve to better interpret and apply the standard, are the following:
a) Income taxes . They are integrated with the tax caused and the deferred tax for the period.
b) Tax caused . It is the tax charged to the entity, attributable to the profit of the period and determined based on the applicable tax provisions in that period.
c) Deferred tax . It is the tax charged to or in favor of the entity, attributable to the profit of the period, and which arises from temporary differences, tax losses and tax credits.
This tax is accrued in one accounting period (period in which it is recognized) and is carried out in another, which occurs when temporary differences are reversed, tax losses are amortized or tax credits are used.
d) Tax caused by paying or receiving in the period :
(-) Advances paid
(+) Taxes caused in previous periods and not known
(=) Tax payable (tax receivable)
e) Deferred tax liability . It is the income tax payable in future periods derived from cumulative temporary differences.
f) Deferred tax asset . It is the tax on recoverable income in future periods derived from deductible temporary differences, tax losses to be amortized and tax credits to be used, as appropriate.
g) Temporary difference. It is the difference between the book value of an asset or a liability and its fiscal value, at the same time, it can be deductible or cumulative for fiscal purposes in the future:
i. Deductible temporary difference. It is that item that, in future periods, will diminish the fiscal profit or increase the fiscal loss; so it generates an asset item for deferred tax.
ii. D temporary ifference combinable. That item that in future periods, will increase the fiscal utility or, decrease the fiscal loss; therefore, it generates a deferred tax liability item.
h) Tax usefulness and fiscal loss . P ara the definition and determination of these concepts must be addressed to the tax provisions in force at the date of the financial statements.
i) Tax credit. P ara purposes of this rule, is any amount on behalf of the entity, which can be recovered against income tax caused, provided that the entity intends to do so; for this reason, it represents a deferred tax asset for the entity.
It is not considered part of this item, the excess of provisional payments on the income tax caused, since this is part of the item called taxes receivable .
j) Tax rate caused . It is the rate enacted and established in the fiscal provisions, at the date of the financial statements that is used to calculate the tax caused.
k) Deferred tax rate . It is the rate enacted or substantially enacted in the tax provisions at the date of the financial statements and, as expected, is the rate that will be used to calculate the tax that will be incurred on the date of the reversal of temporary or temporary differences. , where applicable, of the amortization of tax losses .
l) Effective tax rate . It is the rate that results from dividing the income tax for the period (amount of tax due and deferred tax) between the profit, before the income tax.
Deferred tax arising from temporary differences must be determined using the method of assets and liabilities, this method compares the accounting and tax values of the assets and liabilities of an entity.
From the previous comparison, deductible or cumulative temporary differences arise, to which the corresponding deferred tax rate is applied; the result obtained corresponds to the deferred tax asset or liability for the period.
The book values of the assets and liabilities mentioned in the previous paragraph result from applying the NIFs in full , while the tax values are determined based on the tax provisions applicable in the period.
In this order of ideas, the recognition of a deferred tax liability due to cumulative temporary differences is generated when:
The book value of an asset> the tax value
The book value of a liability <the tax value
On the other hand, the recognition of a deferred tax asset for deductible temporary differences originates when:
The book value of an asset <the tax value
The book value of a liability> the tax value
Deferred tax should not be determined for those items that will not affect the net accounting profit or loss, or the tax profit or loss.
a) The tax due must be presented within the balance sheet, as a short-term liability. This amount must include the tax caused and not paid for the current and previous periods, as well as the advances made; if the latter were greater, the net amount must be presented as a short-term asset.
In the income statement, the tax due must be presented as a component of the item called: taxes on income, without including the tax attributable to discontinued operations.
b) The deferred tax must be presented in the balance sheet; liabilities and deferred tax assets, if any, and net of the estimates for non-recoverable deferred tax asset, must be presented in the long term and must be offset within a single line, unless:
i. Such assets and liabilities do not correspond to the same tax authority; or
ii. Do not have the right to compensate those taxes before the same tax authority. “
The deferred tax for the period must be presented:
i. In the income statement; This tax should be included as a component of the income tax caption, without including the tax attributable to discontinued operations.
ii. In stockholders’ equity, if it is related to other comprehensive items; This tax must be added or subtracted from the amount of these integral items.
In the income statement or in its notes, the composition of the income tax item must be presented, as regards the tax caused and deferred, without including the tax caused and deferred by discontinued operations.
In notes to the financial statements, the following should be disclosed:
a) The composition of the income tax, breaking down the amounts of taxes , caused and deferred.
b) The integration of the income tax derived from discontinued operations, indicating the amount caused and deferred.
c) Tax rates caused and deferred, mentioning the variations of these rates and their impact on profit.
d) The effective tax rate, as well as a reconciliation between it and the tax rate caused, showing the items and amounts for which these rates differ among themselves.
Finally, mention that the effective tax rate is that which results from dividing the income tax for the period (made up of the sum of the tax caused and the deferred tax) between the profit, before the income tax.
The disclosure of the effective tax rate l and the reconciliation between that rate and the tax rate caused, will allow users of financial statements to evaluate the significance of such reconciling items and the impact they might have on the current tax.