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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › effective v/s statuatory rate?
sir what are some of the reasons why effective rate is different from statutory rate?
deferred tax? under or over provisions? are these some of the likely reasons?
basically we will be answering this question in the same way as we’ll be answering a question asking why taxable profits are different from accounting profits.
so both of them will have similar reasoning, isnt it ?
UK example:
PBT 100
Add back fine disallowed for tax 20
Taxable profit 120
Tax @19% = 22.8
Effective rate = 22.8 / 100 x 100 = 22.8%
So, yes, because of permanent and temporary differences