Measuring the Effects of Changes in Foreign Exchange Rates on Determining the Commercial and Industrial Profits Tax Base: A Standard Study on Commercial Banks Operating in the Republic of Yemen

Abstract

The study aimed to measure the effects of changes in foreign exchange rates on determining the commercial and industrial profits tax base, through a standard study on commercial banks operating in the Republic of Yemen. To achieve this goal, the study relied on annual time series of the published financial statements of banks operating in the Republic of Yemen for each of the foreign currency position of assets and liabilities during the period (2011-2017). The Statistical Analysis Software (EViews V.10) was used in data analysis. The results showed that changes in foreign exchange rates affect the determination of the commercial and industrial profits tax base. The study recommends adherence to the requirements of International Accounting Standard No. (21) when measuring the effects of changes in foreign exchange rates on determining the commercial and industrial profits tax base, in a manner that does not conflict with the provisions of Yemeni Law No. (17) of 2010 “income taxes” and its amendments.