Corporate tax planning opportunities oftentimes arise from identifying the appropriate time to recognize an item of income or expense. Deferral of income recognition to a future period or acceleration of expense deductions to a current period results in positive cash flows and savings due to the time value of money. Strategically exploiting the discrepancies in rules for book accounting versus tax accounting may help create timing differences that produce tax benefits. Examples of timing differences utilized by tax planners for U.S. corporations include deferral of taxation on income earned by foreign subsidiaries and accelerated depreciation deductions on qualified fixed assets (IRC Section 168).
Source: Definition of Corporate Tax Planning | Sapling.com
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