What is the tax base?

The concept of tax base is based on the amount that has been attributed to any asset, liabilities and assets of a company for tax purposes, and which is regulated by tax laws.

We can also say that the tax base in accounting is the amount of all assets, liabilities and parts of the equity that appear in a fiscal balance, and that have been produced through business activity.

Tax base of an asset and a liability

There are certain differences between the tax base of an asset and a liability that we must take into account.

The tax base of an asset is the amount of an asset that will be deductible, in reference to tax matters, when it receives the disbursement of the book value, or book value of the asset. If the profits obtained by the company are not taxed, the tax base that the assets will have will be equal to the book value they have in the accounting books.

However, the tax base of a liability is the book value of a liability less any amount that is deductible in the future. For ordinary income that is received in advance, the tax base is equal to the book value less any ordinary income that is not taxable in future years.

 

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