Corporate income tax

Corporate income tax is presented on a company's income statement as "income tax expense." This expense is typically found towards the bottom of the income statement, deducted from pre-tax income (also known as earnings before interest and taxes, or EBIT) to arrive at the company's net income.

The income tax expense reported on the income statement includes both current income taxes, which represent the amount a company expects to owe or has overpaid for the current year, and deferred income taxes. Deferred taxes arise from temporary differences between how income and expenses are recognized for financial reporting purposes (following accounting principles) and for tax purposes (following tax laws).

It's important to note that the income tax expense shown on the income statement may not always align directly with the actual income tax paid by the corporation or the taxable income calculated for tax returns. This is due to varying accounting principles and tax regulations. The effective tax rate, which is the income tax expense divided by pre-tax income, provides insight into the company's actual tax burden.