Research of international accounting standarts on account of tax rules and application of deferred tax

There is a debatable relation between Accounting and Tax rules. International Accounting Standards require financial tables to be prepared according to the accounting rules no matter what the tax rule in use. Thus, the differences between Accounting and the tax rules cause both temporary and permanent differences. Permanent differences originate from the differences in the calculations of accounting profit and taxable profit due to tax legislation in force, and will not be removed in other periods. Non-allowable charges or non-taxable incomes are examples of permanent differences. Temproray differences arise when there is diffrences between the occure time of incomes and expenses and their recognition time as per the tax legislation.Evaluating operational and financial profits in accounting applications in Turkey, permanent differences which are caused by tax exempted revenues and expenses are taken into cosideration while the tax effects of temporary differences are ignored as a result of seasonality. International accounting standards (IAS) No.12 titled Standard classifies temprorary differences as taxable and deductible temprorary diffrences. According to this Standard, taxable temprorary difference originates from the difference between the carrying amount and the tax base of an asset or liability that results in taxable amounts. Accruals of interest income from securities, and financial funds are examples of taxable temprorary diffrences. Deductible temprorary diffrences is the diffrence between the carrying amount and tax base of an asset or a liability that is deductible from tax assetment when determining the taxable profit of future periods. Provisions for severance indemity, and unused tax losses, unused investment allowances, and funds for doubtful receivable are examples of temprorary deductible diffrences.The aim of this paper is to analyse the relations between accounting rules and tax rules in Turkey and also to discuss the innovative features of IAS 12 and potential problems of the use of those innovative standards.