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Deferred Income Tax
On a balance sheet, a tax that a company will owe on its income, but that has not yet been assessed. Because of differences between tax regulations and the Generally Accepted Accounting Principles, income may be recognized on a balance sheet for accounting purposes, but not for tax purposes. However, that income will eventually be recognized for tax purposes and income tax will then be assessed. This tax is called deferred income tax, and is recorded as a liability on the balance sheet.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
deferred taxa PROVISION which a company may make to reflect the difference between CORPORATION TAX actually payable (based on CAPITAL ALLOWANCES), and the tax which would have been payable if the charge had been based solely on accounting profits (reflecting DEPRECIATION rates applied).
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson