Public revenue
Working paper

Evaluation of the accounting and taxation differences of South African firms

Danie Schutte, Pieter van der Zwan, and Caro Janse van Rensburg
September 2021

This paper analyses the permanent and temporary differences of South African firms for the period covered in the SARS-NT panel. The analysis provides valuable information about the differences between accounting profits and the taxable income of South African firms. The paper contributes to the understanding of the effect of specific book-tax differences for different categories of South African firms and provides a basis for the assessment of tax risk and evaluation of tax incentives by the South African tax authorities. In addition, it provides evidence of the trend of the creation or reversal of temporary differences for the 2013–18 tax years. Previous studies concerning book-tax differences focused on listed companies only. In our opinion, this paper is the first to include, in addition to listed companies, SME data as well as other companies’ data that are not publicly available.