Paying taxes is one of the most important duties of every citizen. Unfortunately, it is common for taxes to be deferred, and this is usually due to lack of funds. But does deferring taxes affect your bottom line? Check out what you should know about this topic.
What is deferred income tax?
Deferred income tax is income tax that is remitted to the tax office during the accounting period, rather than when income is earned. Income taxes are settled on an annual basis, so deferred income tax can be settled during the calendar year.
Deferred income tax is remitted to the tax office in the form of a quarterly or monthly installment. Depending on the amount of income and whether the taxpayer is a salaried employee or a self-employed person, the amount of the installment may vary.
Deferred income tax is a tax that is paid by taxpayers in the form of installments. Installments are paid during the tax period, rather than when income is earned. This allows the taxpayer to spread the tax payment over installments and not have to pay everything at once.
When does deferred income tax occur?
Deferred income tax is income tax that is paid by individuals in the period from January 1 to March 31 of the year following the tax year. This tax is paid on the basis of a tax return, which must be filed with the tax office by April 30 of the year following the tax year.
Does deferred tax affect the financial result?
Deferring taxes means postponing the due date of their payment. This can be done when taxes are charged too late or when you do not have the funds to pay them. In such a case, you can apply for a tax deferral to the tax authority.
Deferring taxes can affect your bottom line if postponing tax payments will cause you to miss the due dates of other receivables. In such a situation, the financial result can be expected to be negative.
The deferral of taxes may also affect the financial result if the postponement of tax payments results in the need for additional credit. In such a case, the financial result may be negative.
In summary, deferral of taxes can affect the financial result if postponement of tax payments causes other receivables to be overdue or additional credit is required.
