Profitability
Income tax
What it is
The tax charge on the period's profits — what the company owes the jurisdictions it operates in, once every other expense has been deducted. It is an ACCOUNTING charge: it can differ from the tax actually paid out in the same year, because of deferred taxes.
How to read it
Divided by pretax income, it gives the effective rate — often different from the statutory rate, depending on countries of operation and tax credits.
What it does not tell you
It includes DEFERRED tax (owed later, or recoverable): the accounting charge therefore doesn't match cash paid to tax authorities this year.
Other measures — Profitability
Educational content. Polaris is not a registered investment adviser and makes no recommendation.