M.Comm. (International Accounting) / Recently, there has been a spate of reported cases of large corporate entities paying very little, or no income tax, despite the appearance of being profitable. Enron conducted a lot of business through special purpose vehicle (SPV) companies that were structured specifically for the purpose of paying very little, if any, corporate tax, without having to reduce reported book net profits to achieve this. A study in October 2012 of Starbucks by Reuters found that the company had reported no profits and had paid no income tax for the previous 3 financial years in the United Kingdom despite sales of 1.2 billion pounds. By comparison, McDonalds had to pay tax of 80 million pounds based on a turnover of 3.6 billion pounds, and KFC paid 36 million pounds in taxes on 1.1 billion pounds turnover in the United Kingdom. Another company highlighted for paying no tax is the giant Internet company, Ebay. In its latest financial period the company paid 1 million pounds in tax, on a turnover of 800 million pounds. Again complicated tax structures are at the centre of the tax computation. Consideration has to be given to the role played by the accounting standards, if any, in this scenario, and the extent of the role played by accounting treatments. One has to question if accounting treatments are enabling companies to consistently pay lower rates of tax than is statutorily required, through mechanisms like the raising of deferred tax, or whether it is simply a question of the relevant tax legislation being formulated in a way that allows taxable income to be lower than accounting income. The extent of this book-tax gap and the amount of tax actually paid by companies have been researched to a limited degree. Several studies have been conducted on the financial results from the 1990s, where a consistent decline in the collection of tax by authorities, despite the economic boom that was in existence at that time, has been shown. Research in the 2000s tends to confirm the continuance of this trend of an ever-increasing book-tax gap. The general consensus from the literature review conducted is that the divergence between book income and taxable income is a growing trend, and taxes actually paid by corporates are declining and are on average lower than statutory tax rates.