How to reflect interest on income tax

Refer to section 2 of article 270 of the RF Tax code, which States that penalties for taxes on profit cannot be taken as deductible expenses and should be paid in tax accounting. In accounting, the accrual of penalties is reflected on credit of account 68 "Settlements on taxes and duties", while the debit depends on the amount of the penalty and rules of filling of the reporting enterprise.

Reflect penalties for tax on the profit on the debit of account 99 "Profits and losses". This operation is set by the Instruction on application of chart of accounts, which include tax penalties on the account. However, a number of experts believe that these costs should be attributed to the penalties for violation of the terms of the contract and to charge the debit account 91.2 "other expenses" in accordance with paragraph 11 of PBU 10/99 "Expenses of an enterprise". This forms the permanent tax liability according to the rules PBU 18/02 "Accounting of calculations under the tax to profit".

Analyze the profit before tax in the statement of profit and loss statement form number 2. This option will allow you to determine which is more profitable to include interest on tax on profit. If you use account 99 "Profits and losses", then this amount will not affect the amount of profit before tax. If fines are charged to 91.2, they will reduce the profit before tax. Thus, regardless of account used the value of net profit remains unchanged.

Disclose information about the amount of penalties the explanatory note to the report on profits and losses. The fact is that if the amount of the fine is significant, it will have a significant impact on earnings before tax and, therefore, the financial analysis of a company. This requirement set in paragraph 11 of PBU 4/99 "accounting statements".