Improving income tax disclosures

Investor View ()

Tax reporting reflects the tax liabilities that management expects to pay to the tax authorities; however, there is often a difference between the taxes paid and the charge made in the income statement. So what numbers are investors interested in? Feedback from discussions with analysts on how companies report their tax indicates four key areas where they would like to see enhanced disclosures:

  • Tax rate reconciliation;
  • Cash tax;
  • Deferred tax reversal; and
  • Tax expense in relation items.