Estimating varying rates of corporation tax across numerous entities is proving a principal risk for almost two thirds of Irish companies, according to a new survey
A desk-top review conducted by the Irish Auditing and Accounting Supervisory Authority (IAASA) found that, for the majority of companies surveyed, corporate income taxes were ‘a principal risk and uncertainty and a source of estimation uncertainty’.
The survey provides IAASA’s observations on the disclosure of the effective tax rate, the tax reconciliation disclosed in the notes to the annual accounts, and the disclosure of uncertain tax positions (UTPs).
‘Corporate income tax is an important topic in the annual accounts of companies that are subject to income tax in multiple jurisdictions. Significant judgement and a high degree of estimation may be required to determine the world-wide provision for taxes. Macro-economic factors and other events such as Brexit, US tax reform and OECD initiatives related to base erosion and profit shifting (BEPS) can hugely impact companies’ tax exposure,’ say the report’s authors.
Irish corporation tax currently runs at just 12.5%, one of the lowest rates among developed countries.
IAASA says the survey will assist companies in providing more transparency in their corporate income tax disclosures in their annual accounts.
Corporate Income Tax Reporting by Irish Issuers is here.
Report by Rob Munro
