To pass this unit, please study the 15 vocabulary words below.
the laws which govern the correct payment of taxes
There is strict anti-avoidance legislation in most countries which means that failure to pay the full amount of due taxes is punishable by law.
capital gains tax
the tax on the increase of value of a capital asset which is then sold
The accountant advised the owner to retain the property for 12 months before selling so as to reduce the amount of capital gains tax due.
CEO (chief executive officer)
the highest rank in a company
The CEO decided to hire a freelance tax advisor to help solve the problem.
the duty which is levied on the sale or purchase of goods
The American system of consumption tax in the form of sales tax is much easier to calculate than the European system of VAT.
the tax which is paid on the earnings of a corporation, or entity being treated as a corporation
In America the corporation tax rate varies from 15% to 35% depending on the level of earnings.
put off or postpone to a later date
The company accountant deferred the tax due until the start of next year.
convert into cash
The firm liquidated 50% of their fleet to raise funds for the investment.
try to make as small or little as possible
The accountant minimized the tax liability and saved the company thousands of dollars.
any capital asset which is retained by the company and not likely to be turned into cash within one year under normal trading conditions
When the auditors studied the non-inventory assets and found that two of the company cars were missing.
to have an obligation to do something
In most countries employees are obliged to pay national insurance.
place over against; to balance; as, to offset one account or charge against another
The profits for this quarter more than offset the losses from last quarter, so we are making a profit for the year.
the system of payroll in the UK, by which employers pay all employees
The payroll clerk uses a computerized PAYE system to submit all payroll records to the tax office.
of, or relating to a legal statute
The statutory sick pay in the UK is just over 60 pounds a week, but most companies pay more than that.
an amount of money that a taxpayer is able to subtract from the amount of tax that they owe to the government
The company received a $45,000 tax credit for investing in solar panels for the new property.
the gross profit of a company or individual on which tax is due
As Johns taxable earnings for the year were under the lower level bracket he didn’t need to pay any tax.