CERTYNEX IFRS ACADEMY

In Tessavel's jurisdiction, retained profits are taxed at a higher rate than distributed profits. At the reporting date, no dividend is recognised as a liability. Which rate does Tessavel use for its current and deferred tax?

The rate for distributed profits, as a distribution is planned for next year.

An average of both rates weighted by the historical payout ratio.

The rate applicable to undistributed profits.

The lower rate, out of tax prudence.