Cash taxes

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Cash taxes refer to the amount paid in a period towards tax obligations. To arrive at this figure, change in deferred tax for the period is to be adjusted to the total tax amount.

The reason behind is deferred tax expensed for a period is an amortization but not the actual cash out flow. Cash taxes can be derived as below.

Cash taxes = Total taxes incurred - Deferred tax amortized during the period.


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