IFRIC 23: Uncertainty over income tax treatment | Highlights Tax (Accounting) implications


IFRIC 23: Uncertainty over income tax treatment | Highlights Tax (Accounting) implications

IFRIC 23 clarifies the accounting for income tax when it is unclear whether a taxing authority accepts the tax treatment. Implementation as of January 1, 2019. Consider the Tax implications in time as IFRIC 23 might impact the Tax Position in the Financial Statements.


In 2017, the International Accounting Standards Board’s Interpretations Committee issued IFRIC Interpretation 23 (hereinafter: ‘Interpretation’) entitled ‘Uncertainty over Income Tax Treatments’. Implementation date (annual periods beginning on or after January 1, 2019) is approaching fast. The Interpretation provides guidance on how to account for uncertainty over income tax treatments under IAS 12. The new Interpretation may impact the existing positions with respect to uncertain tax treatments, the accounting policy, financial statements disclosure and data gathering processes.

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Highlights IFRIC 23

  • Interpretation requires an entity to determine whether uncertain tax treatments are assessed separately or as a group; 
  • Assumption that a taxation authority will examine the position as if it has a right to examine and have full knowledge of all relevant information when making those examinations (no detection risk); 
  • If an entity concludes that it is not probable that a taxation authority will accept an uncertain tax treatment, the entity should reflect the effect of uncertainty in determining its accounting tax position; 
  • Reassessment in the event of change in facts and circumstances on a yearly basis.
Tax account alerts – Netherlands- IFRIC 23

Action required

The implementation of the Interpretation requires an assessment of your current policy in relation to uncertain tax treatments in order to avoid scrutiny of the auditor. This would also involve a review of your current tax reporting process. Finally, in order to facilitate an ETR neutral implementation an assessment is required of existing uncertain tax treatments.

More information on this topic?

For more information contact Jeffry Keulaerds or Sander Kloosterhof via the contact details given below

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