Section 29 Income Tax was developed after considerable debate and has become very different from both the IFRS for SMEs and the original proposals for tax accounting under FRS 102 as set out in the accounting regulator’s first draft for New UK GAAP.

Section 29 covers accounting for income taxes, being ‘all domestic and foreign taxes that are based on taxable profit’, and taxes that are payable by a subsidiary, associate or joint venture on distributions to the reporting entity.

VAT is also addressed even though it is outside the above definition, being levied on individual transactions regardless of profits.