Taxable Income

Tax calculation for foreign companies is performed in the Current Taxes dialogue. Unlike German companies, income calculation is carried out without using tax detail dialogues. The structure of the Current Taxes dialogue is configured individually for every country in Master Data (dialogue Toolbox); and described separately.
Usually during income calculation only the corporate income tax is taken into account:

If the checkbox Local tax column in Toolbox is activated in the master data dialogue Company, this local tax column is considered during the income calculation. Thus, different tax bases can be used for these tax types.
In addition, it is possible to add a comment for every line.

Initial value: Profit before tax

Income calculation starts with profit before tax calculated acc. to local commercial law (not profit before tax acc. to IFRS). Afterwards inner balance sheet and off-balance sheet corrections are considered.

Inner balance sheet corrections (Surplus-/ Deficient result)
Row 2 displays surplus-/ deficient result and thereof temporary and permanent differences:

Proposed values are taken from the B/S Comparison dialogue (subdialogue Local GAAP – Tax Balance). Based on the prior period (which is determined when creating a period) the GTC calculates the changed differences between local balance and local tax balance sheet. In addition, the changes of temporary and permanent differences in B/S Comparison are taken into account.
Proposed values (thereof temporary differences; thereof permanent differences) per account position can be traced using the report Local GAAP – Tax comparison.

Off-balance sheet corrections
Off-balance sheet corrections are entered by the user (there is also the possibility of an automated import of e.g. Excel tax calculation sheets). Rows available in the dialogue are selected during the Toolbox configuration.
In addition to off-balance sheet corrections non-period taxes and eventual LCF can be considered. These two issues are described in separate chapters.

Used tax rates
Taxable income is multiplied by a tax rate (determined in Master Data) for purposes of corporate tax rate. Tax rate of local income tax is used for calculation of local tax.

For TRR purposes: individual off-balance sheet corrections in the Corporate Tax Rate column are considered issue-related in TRR (e.g. tax-free dividends or non-deductible expenses). Off-balance sheet corrections for purposes of local income tax are processed in the TRR row Local tax (only foreign countries) in total.

Special circumstances
Further special circumstances such as e.g. withholding tax or current taxes OCI and equity can be added at the end of the dialogue.

Utilisation/Addiotion loss carry forward

For foreign companies, the tax calculation is performed in the Current taxes dialog. In contrast to German companies, income is calculated without using detailed tax dialogs. The structure of the dialog Actual Taxes is configured per country within the master data (Dialog Toolbox) and is described separately elsewhere.

By default, the income calculation only considers the Corporate Income Tax.

The calculated LCF is linked to the Rollforward LCF subdialogue in the LCF dialogue:

Scenario: utilisation of loss carry forward
If the income calculation results in a tax profit and at the same time there are tax LCFs, enter the info into the row 12.1 (Utilization of Tax Loss Carry Forward). Utilisation of loss is also taken into account in the LCF dialogue.
Taking into account corporate tax rate and local tax
If the Local tax column in Toolbox option is activated in the Master Data, the corresponding addition/utilisation of LCF is taken into account in terms of local income tax (in the LCF dialogue: Tax losses carry forward local tax).

Current taxes and other income taxes relating to other periods

Current taxes and other income taxes relating to other periods are not calculated in the GTC, only saved rows 25ff. in the _Current Taxes_ dialogue. The entries result in corresponding TRRs in the TRR dialogue.

Calculation of tax allocation

The calculation of tax allocation was changed in the GTC with the calculation basis 1300681 (from version 11.00.01) and now requires an adjustment in the toolbox. It is now required that the taxable income of the tax group company is completely transferred to the head of tax group via line 11.0. If the calculation of tax allocation is activated in the company master data, the tax allocation is then calculated on this amount in line 20.2.97. This can optionally be corrected via line 20.2.98. If the calculation of tax allocation is deactivated and a separate tax of the fiscal unit is to be shown, the income transfer must be adjusted manually via line 11. Without the transfer of income (automatically via 11.0 or manually via 11) it is no longer possible to correctly display an tax group company.

In the case of the tax group company, the income of the head of tax group must still be entered manually in line 11 (default value is calculated after saving the Tax groups dialog). For a correct display - also within the TRR - the proposed values in lines 20.1.1 and 20.1.99 must be adopted afterwards. By the way, the parent company must not have activated the calculation of apportionments.

In this context, the calculation for standalone companies has been adjusted in that way that for the calculation of a tax refund (in case of loss) the master data setting for the tax allocation must be activated.

For the correct display of a tax group, the following lines must therefore be activated:

11.0	Automatic Transfer of taxable income
20.1.99	thereof Tax alloc. from Income transfer
20.2.97	Tax allocation on 11.0 (auto)
20.2.98	Tax allocation on 11.0 (correction)

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