There are some problems in the annotation income tax section of CFA. I haven't learned this section before, so I ask questions here. Excuse me.

Honey, of course, the tax will not be paid until the report comes out, which is next year.

However, due to the difference between tax law and accounting standards, it is necessary to adjust the accounting results when paying taxes, which also causes the difference between the income tax on your income statement and the income tax actually paid, thus causing the difference.

Some differences are temporary and some are permanent.

For example, temporary, depreciation methods are different, accounting depreciation is 5 years, and tax law stipulates depreciation 10 year. Then, the difference in the first five years is that the accountant thinks less tax and the tax law thinks more tax. In the next five years, there was no depreciation in accounting, taxes were paid more, and tax laws collected less. This is reversible.

Permanent differences, such as the deduction ratio of business entertainment expenses, all business entertainment expenses are deducted as management expenses in accounting profits, and the tax law stipulates a limit. Then the tax law does not recognize the expenses deducted by your accountant, resulting in a small accounting profit and a large tax profit, resulting in a permanent difference that cannot be reversed in the future.