CERTYNEX IFRS ACADEMY

A joint arrangement in which Moranvel holds rights distributes part of its profits to Moranvel. The law of the joint arrangement's country requires it to pay a withholding tax on that distribution. For Moranvel, how should this withholding tax be classified?

A finance cost linked to the distribution, outside the scope of IAS 12.

A mere reduction of the amount distributed, with no consequence under IAS 12.

An income tax only if the joint arrangement is a subsidiary of Moranvel.

An income tax under IAS 12.