The statement will show the business's assets in one column and its liabilities and owner's equity in another column.BALANCING PAYMENT -- A payment, normally from one or more participants to another, to adjust participants’ proportionate shares of contributions, that increases the value of the contributions of the payer and decreases the value of the contributions of the payee by the amount of the payment, in the context of CCA (Cost Contribution Arrangements). BASE COMPANY -- Company situated in a low-tax or non-tax country (i.e.BANK SECRECY PROVISIONS -- Provisions which require that a bank refuse to disclose information about its customers to third parties, including the tax authorities. tax haven), which is used to shelter income and reduce taxes in the taxpayer's home country.
Dependent agency constitutes a permanent establishment for the other company and the income achieved through the agency is taxed on the income earned from the country where the agency is located whereas independent agency does not.AGGREGATION -- Term used to denote the adding together of the taxpayer's income from all sources in order to determine the applicable tax rate for income tax purposes.ALIENATION OF INCOME -- Term generally used to describe the transfer of the right to receive income from a source while not necessarily transferring the ownership of that source to the same person.ALLOCATION -- The apportionment or assignment of income or expense for various tax purpose, e.g., between permanent establishments in various jurisdictions ALLOWANCE -- Deduction or exemptions generally made in computing income taxes, inheritance and gift taxes and some forms of sales taxes.ACCRUAL BASIS (ACCRUAL METHOD) -- An accounting method whereby income and expense items are included in taxable income or expense as they are earned or incurred, rather than when they are received or paid AD VALOREM TAX -- A tax on goods or property expressed as a percentage of the sales price or assessed value ADMINISTRATIVE COMPANY -- See: Service company ADMINISTRATIVE EXPENSES -- Expenses that are not as easily associated with a specific function as are the direct costs of manufacturing and selling.
It typically includes expenses of the headquarters office and accounting expenses.
Disclaimer: Explanations on the terms are very condensed and may not be complete.
They are not considered to necessarily reflect official position of the OECD in interpreting international tax terms, for example, in the tax treaty context.
A-B-C-D-E-F-G-H-I-J-K-L-M-N-O-P-Q-R-S-T-U-V-W--Z -A- ABATEMENT -- A reduction in the assessment of tax, penalty or interest when it is determined the assessment is incorrect ABUSE OF LAW -- The doctrine which allows the tax authorities to disregard a civil law form used by the taxpayer which has no commercial basis ACCELERATED DEPRECIATION -- Method of depreciation under which taxpayers may allocate larger depreciation deductions to the first year or first few years of useful business assets, such as plant and machinery ACCOUNTING BASIS -- Method of calculating amounts subject to income tax and VAT.
In respect of VAT, tax would be computed as a percentage levy on the excess of sales over purchases.
ADVANCE RULING -- A letter ruling, which is a written statement, issued to a taxpayer by tax authorities, that interprets and applies the tax law to a specific set of facts AFFILIATED COMPANIES -- General term used to describe the relationship between two or more companies linked by a common interest AFFILIATION PRIVILEGE -- Tax relief or exemption accorded to dividend distributions made by a resident subsidiary company to its parent company which owns a certain minimum percentage of shares, in order to mitigate double taxation of such dividends.