How will IFRS impact tax reporting and tax filings?
Conversion to International Financial Reporting Standards (IFRS) will have a significant effect on all aspects of the tax lifecycle – planning, provision and compliance . Whilst the effect will vary between companies and industries, and will depend on decisions made by the regulators on the roadmap for IFRS implementation in India, it is safe to say that, for many companies, an IFRS conversion will: • Affect cash taxes • Change effective tax rates • Require recalculation of deferred tax balances • Involve reassessment of unrecognized tax benefits • Increase the importance of tax planning • Raise issues related to tax return accounting methods In turn, these changes will require companies to consider: • Drive changes to technology systems • Affect tax provision and compliance processes • Generate a need for internal training to address resource needs The debate on whether companies in India will be allowed to file corporate tax return on IFRS basis or on Indian GAAP basis is on and with
