090 Influence of “Tax Reform 2011 Act” and “Financial Resource for Recovery Act” on the tax effect accounting
“Tax Reform 2011 Act” and “Financial Resource for Recovery Act” have been issued on Dec. 2, 2011. Followings are the items that could have an impact on the tax effect accounting.
1) Corporation tax will be lowered down to 25.5% from 30%, and the special tax for the recovery will be added to it (effective from the fiscal year beginning from April 1 2012).
2) Maximum amount of tax loss carryover will be 80% down from 100%, and carryover term will become longer from 7 to 9 years (tax loss that incurred for the fiscal year ended after April 1 2008) for the companies other than SMEs.
According to this reform, the financial report on the end of the fiscal year and quarterly reports requires a change in calculation of the tax effect accounting because it has to use the new effective tax rate. And also we have to be careful of the reversal of the deferred tax assets that could be triggered by the 20% decrease of the tax loss carryover and lowered corporation tax.
