It's quite easy to get confused here between taxable profits and actual profits.

So we just need to be really careful.

The profit before tax will be the taxable profits in a simple world.

So we'll go and fetch that.

But we are modeling to adjustments to taxable profits being the thin cap, which we're not ready to do, and the NOL adjustment. And the NOL adjustment we can sum up the two things we did in the table earlier and the product of that will be what the tax authority considers to be taxable.

And again, just careful with the summing there.

Now if we pull that to the right, but we should see, so we've seen the divergence between the accounting profit, which so far is minus a million or so there.

And then the taxable profit, which the tax authority has deemed to be zero there because we're able to take that taxable loss and put it away until the next year.

And again, there's a divergence in the next year as we are making taxable profits in a simple world.

But then we have our know adjustment and that will get even more complex when we add thin cap into the mix.

And again, just be careful because in these models it can be very, very easy to get confused between accounting, profit, taxable profit, and effectively set them equal to each other and they're not.

And the tax expense is effectively the meeting point between those two worlds.

What we'll find is that we're going to be charged 25% on our taxable profits.

You can see what the NOL is doing effectively, or the NOL rules.

They're avoiding effectively a rebate in tax as well.

So the tax authority is not in the habit of handing money to projects or companies.

And what they'll do to avoid that is let you put away losses and then bring them out in subsequent years.

So although there's a reduction in tax, you're never getting a tax rebate, as in the tax expense isn't negative there.

It can be negative, but it isn't here.

Now we're ready to reunify those two worlds then, which is the tax authority world and the accounting world.

So we grab profit before tax again, and we've grabbed it several times now.

Now the tax expense, we're ready to do that.

Now I know it's colored yellow, but it shouldn't be.

And so the tax expense, now that should be a negative figure, so I'm gonna make that negative.

Probably should have done that earlier. And then I'm going to sum those two.

And we've now got our accounting net income.

And again, just as a reminder, remember we put away the NOL as in the net operating loss.

And it can be tempting to think that there is no profit or loss in that year because you can get tax and accounting mixed up.

That's not the case. The tax authority has kind of put away that loss. So from Their point of view, there's no loss, there's no profit.

But from an accounting point of view, the loss still exists.

It's just we didn't pay or receive any tax on it.

Now, if you are very details driven person or if you know a lot about the accounting, you might start thinking, Hey, how about deferred taxes? We've simplified deferred taxes for this model. Okay? So in reality there would be an interplay between the expense, the accrual and deferred taxes, but we've simplified that away.

Okay? So what I'm going to do next is take that tax expense and analyze it into what we're gonna pay this year and what we're going to pay next year.

Lots of tax authorities end up splitting the tax bill 50 50 this year and next year.

And so given this model is trying to create some detail and show you how that might work, that's what we're gonna do here as well.

We're going to take the proportion and multiply it by the tax expense.

So that's what we're paying within the year.

And given that's described as paid, so a cashflow, I'm gonna leave that as a negative.

Now the next one, I'm going to take this proportion, which is the same proportion, but that might be subject to change.

And we're gonna take the tax expense and we're gonna split it the other way.

Now this line is destined to be in the balance sheet.

And so I would be happier if that's positive presentation.

And so I'm going to flip the sign from the tax expense.

I'll pull that to the right and we end up with the same number, but that's because it was 50 50 in the assumptions.

It's now time to analyze that into cash flows.

Now the first one is simple.

We just say the stuff we're paying in the year is what we're paying in the year.

The second one is a little trickier.

We're paying last year's payable, which is a slightly uncomfortable start within column E there, but we need a blank space to start with.

And we also need to flip the sign because we're taking it from balance sheet, positive presentation to cashflow, negative presentation.

We've then got our total tax cashflow, which will be helpful for our debt schedule.

And you can see that what we've got is as the project starts to make money and it runs out of NOLs, it ends up paying tax 50 50.

And you can see that kind of triangular and what you're seeing there is the hangover of the payable from last year.