25 May 2014
Corporate taxes is the tax levied by the government on the income earned by the body corporates. For example, in India, the corporate tax rate is 33.99% on domestic companies. In US, it is ~40%.
Treatment of Corporate Taxes in Cash Flow statement (Indirect Method):
Under Cash Flow from operating activities, you are required to add back the provision for taxes in 'Net income after taxes'; and deduct the amount of corporate income tax paid.
Cash Flow from Operating Activities: Net Income after taxes (+) Provision for Taxes (-) Corporate Income Tax Paid
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