After 17 years of annual losses it is refreshing to see Progressive Planet Solutions actually having to deal with the prospect of reporting taxable income and how to avoid paying income taxes at the 27% rate acknowledged in the Q2 2025 financial statements (see note 24).
Using the 27% tax rate and the disclosure of a Current Income Tax Expense of $146,439, PLAN is reporting a taxable income for the first half of fiscal 2025 of $542,367. This otherwise payable tax liability is then reduced to $0 by the application of the equivalent loss carryforward amounts to reduce taxable income to $0.
As discussed in Note 24, the Company has forecast that the taxable income in the next 12 months (November 1, 2024 to October 31, 2025) will be "approximately $1,800,000". This would result in a tax expense of $486,000 in the absence of previous tax losses. Given the significant tax losses that PLAN has accumulated, generally accepted accounting principals allows the immediate recognition of the positive impact the use of the losses will have. Management has prudently chosen to only give recognition to the impact in the next 12 months at this time, and will obviously monitor this treatment as PLAN's return to profitability becomes established as a known fact. In the meantime it is great to see a $486,000 tax asset now recognized on the PLAN Balance Sheet. I will need to check my CICA Handbook to see whether this asset might be listed with Current Assets given it is expected to be realized within the next 12 months.