MARKETS / GLOSSARY / INCOME TAX

Income tax

Income tax is the charge for tax on the year's profit, as reported in the income statement — the line between pre-tax profit and net income.

Definition

How it is computed here

Formulaas reported in the income statement (current tax + deferred tax)
UnitCurrency amount
PeriodOne fiscal year, as reported
SourceExtracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from
Identifierimposto
The inputs

What goes into the formula

Current taxWhat the company expects to actually pay to tax authorities for this year.
Deferred taxThe accounting adjustment for differences between how profit is measured for shareholders and how it is measured for the tax authority. It can be negative, and in a year of large write-downs it can turn the whole line into a credit.

A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.

Worked example

How to calculate income tax, step by step

A profitable company in a normal year.

Operating income$400M
Interest paid$50M
Income tax$74M
  1. Pre-tax profit = 400 − 50 = $350M.
  2. Net income = 350 − 74 = $276M.
  3. Effective tax rate = 74 ÷ 350 = 21.1%.

Result: $74M of tax, a 21.1% effective rate

The effective rate is what the company was actually charged, and it is rarely the statutory rate of any single country.

The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.

Why it matters

What income tax is good for

Tax is often the second largest cost on the statement and the one most likely to change without the business changing. A company that moves profit between jurisdictions, or that finally uses up accumulated losses, shows a step change in net income that has nothing to do with how it traded.

The limit

What this number does not tell you

This is the tax CHARGED for accounting purposes, not the cash paid to any government — the two differ, sometimes by a lot, and the difference is the deferred component. A negative figure here is a credit, not a refund cheque. And a low effective rate says nothing on its own about aggressiveness: it may be losses carried forward, a research credit, or where the customers happen to be.

Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.

Advertisement
AdSense · Leaderboard 728×90 · responsive
In the data

Highest reported income tax

From the most recent fiscal year of each company. Only companies reporting in US dollars are ranked here — a figure in yen or won is not larger, it is in another currency.

On a real company

See it in a published filing

Their sectors

These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.

Related

Read next