Okuzeka
Accounting & Tax vocabulary · Income & Corporate Tax

Deferred tax

Meaning in accounting & tax, with examples

nounAdvanced term

In accounting & tax, deferred tax means: Tax that will be paid or recovered in future periods because some income and expenses are recognised at different times in the accounts and in the tax return.

In Turkish: ertelenmiş vergi

How it is used

Covered by IAS 12. Companies recognise deferred tax assets and liabilities on temporary differences, for example when tax depreciation is faster than accounting depreciation.

Example sentences

  1. The difference between tax and book depreciation creates a deferred tax liability.

  2. We only recognise a deferred tax asset on past losses if future profits are probable.

Common collocations

  • deferred tax asset
  • deferred tax liability
  • temporary differences
  • deferred tax expense
  • taxable incomeThe part of income on which tax is actually calculated, after allowed expenses, exemptions and allowances have been deducted from total income.
  • corporate taxA tax on the taxable profits of companies, calculated on the profit for the year after allowed deductions and adjustments.
  • tax liabilityThe total amount of tax a person or company owes to the tax authority for a period, or more generally the legal duty to pay a particular tax.
  • IFRSInternational Financial Reporting Standards: the global accounting rules issued by the IASB and required for listed companies in more than 140 jurisdictions.

More terms: Income & Corporate Tax

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level:

This page explains English vocabulary for learners. It is not financial advice.