Deferred Taxes in Trade

Abstract

The issue of deferred taxes (deferred tax assets and deferred tax liabilities) have been intensively analysed from different perspectives. However, there is almost no paper entirely devoted to the analysis of the effects of deferred taxes on the performance of trade enterprises. Regarding this fact we attempt to conduct thorough analysis of the impact of deferred taxes on the performance of trading companies, with special insight into Serbia. Empirical analysis shows that deferred taxes are significant factor of performance of trading companies in countries with developed market economy, what is also the case with trade companies in Serbia. All this suggests that managers of trading companies must efficiently manage deferred taxes (net deferred tax assets (liabilities)) in order to achieve the target profit.

Keywords

• deferred tax assets
• deferred tax liabilities
• the effective tax rate
• evaluation and effects
• profit