Taxable Income
Short definition
Taxable income is the base on which corporate tax is assessed. It is not IFRS net income; disallowances, exemptions, revaluations and timing build the bridge.
Detailed explanation
The CFO forecasts cash tax from the tax-base bridge, not from EBITDA. Inflation accounting and FX split the base from the P&L.
Loss carry-forwards bring prior tax losses into this year’s base. Incentives can zero the base and cut cash tax while also distorting ETR.
Why it matters for the CFO
A budget of “profit × statutory rate” misses cash tax. Advance instalments depend on a prior estimate of the base.
How to read it
The taxable / IFRS profit gap is a signal of sustainable T. An audit restates the historic bridge.
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Definitions are educational. They are not investment, credit or tax advice.