CERTYNEX IFRS ACADEMY

For Lanvérac, the tax rate applicable to profits for the year ended 31 December 20X5 is 28%. In February 20X6, before the financial statements are authorised, Parliament adopts a 25% rate applicable retroactively to 20X5 profits; at 31 December 20X5, this law was neither enacted nor substantively enacted (case data). Which rate should be used for 20X5 current tax?

28%, the rate enacted at the reporting date.

25%, since this rate applies to 20X5 profits.

The average of the two rates, i.e. 26.5%, to reflect the uncertainty.

The rate in force at the date the tax balance is paid.