taxes - accounting

Term
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Government subsidies
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Terms in this set (18)
Government subsidies
exempt from taxation - PERMANENT
gains on securities
taxed only when realized (i.e. when securities are sold); changes in fair value of securities are exempt from tax purposes - TEMPORARY
dividend revenue
only 5% is taxed and 95% is exempt from tax purposes (subtract 95%) - PERMANENT
gains on disposal of an asset
taxed either in a single year or over 5 years - TEMPORARY
losses due to impairment
non deductible; any loss is deductible only when realized (i.e., disposal of the asset) - TEMPORARY
interest expense
deductible if <30% of EBITDA of the year; any interest expense exceeding the threshold may be deducted in future years if it is <30% of EBITDA - TEMPORARY
wages expense (BoD)
deductible only in the year in which the expense is paid - TEMPORARY
depreciation of equipment
maximum depreciation rate on equipment is 20%. any amount exceeding that threshold will be deductible when the depreciation for accounting purposes will be lower - TEMPORARY
costs borne for private benefit of shareholders
non deductible - PERMANENT
contingent liabilities
deductible only in the fiscal year in which the loss becomes certain - TEMPORARY
advertising expensesdeductible only up to 1% of revenues for the year - PERMANENTtelephone expensesdeductible only for 80% of their amount (add back 20%) - PERMANENTuse of vehiclesdeductible only for 20% of their amount (add back 80%) - PERMANENTstart-up costsfully deducted in the year they incur or over 5 years (add back 80%) - TEMPORARYdonationsdeductible only up to 1% of revenues for the year - PERMANENTbad debt expensedeductible within 0.5% of outstanding trade receivables, the exceeding amount is deductible only in case the amount is written off - TEMPORARYimpairment losses on landnon-deductible - PERMANENTR&D costscounted twice - PERMANENT