Income Tax Payable Definition
Income Tax Payable is the amount of tax payable within the next tweleve months.
Income Tax Payable refers to the amount of tax a company is obligated to pay within the next twelve months, these tax amounts will be due to the government or authorities. The Income Tax Payable is an amount found on the balance sheet and a component of a companys Current Liabilities. The way in which it is calculated will differ based upon the abiding country tax laws wherein the company resides. Whilst it is usually a Current Liability coming due within the next tweleve months, for any Income Tax Payable amounts due outside of this period they are instead seen as a Non Current Liability.
In line with accounting standards the Income Tax Payable is an expense recorded as it is incurred, regardless of whether it not being due within the same period. Parts of the amount due can be diminished through use of any avaialable tax credits. Any payments made towards the Income Tax Payable, the Liability is also then eliminated from the balance sheet.