Accrued Tax

Definition - What does Accrued Tax mean?

Accrued taxes are taxes that a party has accumulated over a certain amount of time, but that are yet to be paid. These taxes may be on income, property or other assets. The party must pay the taxes back within a certain amount of time, or else it could be financially punished.

Justipedia explains Accrued Tax

Accrued taxes are basically taxes that have been built up and need to be paid. For example, say a corporation has acquired $20 million worth of buildings. Accrued taxes would include property taxes that the corporation now owes to the government due to its acquiring of the properties. Even if the corporation acquires the property during the first quarter, it still owes the taxes later in the year if it has not paid them yet. A corporation must pay all of the taxes that it accrues during the year.

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