A research expense of 700 is recognized as expense in the statement of profit or loss in the period but not allowed as a deduction for tax purposes until a future period. The income tax rate is 40%. What is the tax base?
A. Zero
B. 700
C. 280
The tax base refers to the amount of the expense that is recognized for tax purposes. In this case, the research expense of 700 is recognized as an expense in the financial statements but is not allowed as a deduction for tax purposes until a future period. Therefore, the tax base for this item is zero for the current period. So, the correct answer is:
A. Zero
