CFA Practice Question

There are 96 practice questions for this study session.

CFA Practice Question

Tax credits and withholding tax on dividends can cause differences between:

A. the statutory tax rate and the effective tax rate.
B. the statutory tax rate and the cash tax rate.
C. the cash tax rate and the effective tax rate.
Correct Answer: A

User Contributed Comments 2

User Comment
tpraturi Tax credits, withholding taxes on dividends, adjustments from previous years tax returns, expenses Not deductible for tax purposes are some of the reasons for difference between Statutory tax rate and Effective tax rate
CFAJ Statutory tax rate = legally imposed tax rate
Cash tax rate = tax expense/NI before tax
Effective tax rate = tax expense / NI before tax
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