ACCOUNTING AND AUDIT

BONDAR Mykola ¹, BABICH Vitaliy Vasylovych

¹SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-1904-1211

Permanent tax differences: reflecting in the accounting and financial reporting under new draft of the section iii of the tax code of Ukraine

The new approach to forming the base of income tax due to the draft of amendments to the Tax Code of Ukraine concerning the construction of algorithm of income taxation considering tax preferences has been considered in the article. An inevitability of ambiguous use of the term ""income ” in economic sense and as an object of taxation has been defined. An expediency of introducing the practice of the income tax determination based on financial results ’ adjustment according to financial accounting has been substantiated. The necessity of the accounting of permanent tax differences ’ integration to the accounting system without narrowing its functions to fiscal ones has been defined. The composition of permanent tax differences has been analyzed and reasonable recommendations for their specification considering economic situation have been substantiated. Approaches to the order of the differences ’ display in the system of accounting concerning revenues and expenses are given. The issue of the corresponding information ’ disclosure in the Income Statement under the new edition of the Section III of the Tax Code of Ukraine and in tax reporting has been considered. The necessity of clarifying the structure of the income tax return is proved.

Keywords: permanent tax differences, temporary tax differences, the object of taxation, accounting, financial result before tax, financial statements, tax statements

JEL: H21, H25, M41

BONDAR M. . Permanent tax differences: reflecting in the accounting and financial reporting under new draft of the section iii of the tax code of Ukraine / M. . BONDAR, V. V. BABICH // Фінанси України. - 2014. - № 5. - C. 106-115.