Why is IFRS Not a Good Starting Point for a Tax Base?

Abstract

This article discusses whether IAS/IFRS should be used as a starting point in the context of the Common Corporate Tax Base in the European Union. Non-European countries may also have an interest in the analysis on the use of IFRS to compute the corporate tax base, as well. After a background discussion on the application of IAS/IFRS as the start point for a tax base, some principles of tax bases are analyzed. Additionally, the disadvantages and advantages of using IAS/IFRS as the start point are presented. In the end, the creation of an independent tax accounting framework is recommended, which should have as the primary purpose taxation, and taxpayers and governments as the users of the information. In this new arena, the IAS/IFRS should be a valuable toolbox of concepts that can be adjusted for a tax perspective.