The International Accounting Standards Board (IASB) has issued amendments to IAS 12 Income Taxes. The
amendments are focused to give companies a temporary relief from accounting for deferred taxes, arising from the application of international tax reforms issued by The Organisation for Economic Co-operation and Development (OECD).
In December,2021, The OECD published the Pillar Two model rules in order to ensure that large multinational companies would be subject to a minimum 15% tax rate and more than 135 countries and jurisdictions representing more than 90% of global GDP have agreed to the Pillar Two model rules.
In order to respond to stakeholders’ concerns about the uncertainty over the accounting for deferred taxes arising from the implementation of the rules and to ensure that companies are supported during the implementation of the OECD’s rules, the IASB has amended the tax accounting requirements.
The amendments will include:
Although, companies can take benefit from the temporary exception immediately but are required to
provide the disclosures to investors for annual reporting periods beginning on or after 1 January 2023.