Effective tax rates and Deferred taxes
Hi everyone, this is my first post here, nice to meet you all!
I am working in a 3-statement model and created a simple tax schedule, which takes book EBT and adds back book depreciation, to calculate government taxes using tax losses and accelerated depreciation. Similar to the operating model template from Macabacus (WSO won't let me post the link since I am new), if a reference helps.
I understand marginal tax rates should be used when calculating government taxes, but would it make sense to use effective tax rates to determine book tax expense?
Using effective tax rates for book taxes would make book tax more accurate, and wouldn't impact government taxes calculated. The only effect would be to increase DTL since effective tax rates < marginal tax rates, which would represents other deferred taxes adjustments. Am I missing something?
Thanks for the help
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