Issue (AD_AASB112_Tax_Public_Sector_Entities_10-15)

The AASB received a request to consider whether for-profit public sector entities that are required to pay income tax equivalents under the National Tax Equivalent Regime (NTER) should continue to apply AASB 112 Income Taxes.

The AASB considered the issue of whether income tax equivalents paid by for-profit public sector entities should continue to be accounted for within the scope of AASB 112.  The submitter contended that payments under the NTER are not in the nature of an income tax; rather, they are in the nature of a distribution to owners and should not be within the scope of AASB 112.