Lesson-5 on Tax

Question: What is Tax-Free Zone ?  

Answer:

Area within the territory of a country in which customs duties and other types of indirect taxes are not applied.

Question: What is Tax Haven ?

Answer:

Tax haven in the "classical" sense refers to a country which imposes a low or no tax, and is used by corporations to avoid tax which otherwise would be payable in a high-tax country. According to OECD report, tax havens have the following key characteristics; No or only nominal taxes; Lack of effective exchange of information; Lack of transparency in the operation of the legislative, legal or administrative provisions.

Question: What is Tax Holiday?

Answer:

 A tax holiday offers a period of exemption from income tax for new industries in order to develop or diversify domestic industries.

Question: What is Tax Threshold ?

Answer:  

Level (of income, capital, sales, etc.) at which tax commences to be levied.

Lesson-4 on Tax

Question: What is Taxable Event ?

Answer:

It is the  Term used to define an occurrence which affects the liability of a person to tax.

Question: What is Taxable Period ?

Answer:

Taxes are levied by reference to a period of time called the "taxable period". Tax year

Question: Who is Tax Agent ?

Answer:

Term which refers to a tax adviser who assists the taxpayer in fulfilling his obligations under the legislation.

Question: What is Tax Bill 

Answer:

Draft law on a tax matter which, after approval by the government of a country, is submitted to the Parliament for debate.

Question: What is Tax Clearance Certificate ?

Answer:

Document issued to a taxpayer by the tax authorities certifying that the taxpayer has either paid all taxes due or that he is not liable to any taxes. In certain countries a tax clearance certificate must be produced before a person can leave the country.

Question: Who is Tax Exile ?

Answer :

A natural or legal person who severs all ties which make him fiscally resident in a particular country and moves to another jurisdiction for tax reasons.

Question: What is Tax Foreclosure?

Answer:

The process of enforcing a lien against property for non-payment of delinquent property taxes.

Lesson-3 on Tax

Question: What is Fringe Benefits?

Answer:

Fringe Benefits is the Benefits supplementing normal wages or salaries. Fringe benefits may be given in the form of a money allowance, e.g. a holiday bonus or in the form of benefits in kind, e.g. free accommodation. Although most countries tax the benefit of employer-provided automobiles and accommodation, the tax treatment of other fringe benefits varies considerably.

Question: What is the Hidden Tax?

Answer:

 Hidden Tax is the Indirect tax paid by the consumer without his knowledge

Question: What is the Hardship Clause?

Answer:

Hardship Clause is the Discretionary power of the tax authorities to mitigate any harsh results of the tax law.

Question: What is the Incidence Of Tax?

Answer:

Incidence of Tax is the person who bears the tax burden in economic sense, which could be different from the person paying the tax.

Question: What is Lottery Tax?

Answer:

 It is tax on the sale of lots or on the receipt of prizes after the drawing of lots.

Question: What is Multi-Stage Tax System ?

Answer:

It is a system of  Indirect tax on the same goods at successive stages of production and distribution.

Question: What is Progressive tax system ?

Answer: A tax system wherein the average tax rate increases for some increases in income but never decreases with an increase in income

Question: What is Presumptive Taxation ?

Answer:

It is Concept of taxation according to which income tax is based on "average" income instead of actual income.

Question: What is Property Tax ?

Answer:

Group of taxes imposed on property owned by individuals and businesses based on the assessed value of each property.

Question: What is Surcharge? 

Answer:

Additional amount which is calculated on and added to the normal charge or levy. In other words, the base on which a surcharge is assessed is the normal or basic amount due.

Question: What is Taxable Base ?

Answer:

The thing or amount on which the tax rate is applied, e.g. corporate income, personal income, real property.

Lesson-2 on Tax

Question: What is Double Taxation?

Answer:

Double taxation occurs when a taxpayer is taxed twice for the same asset or income.

For example, corporations pay taxes on their annual earnings, just as individuals do. When corporations pay out dividends to shareholders, those dividend payments incur income-tax liabilities for the shareholders who receive them, even though the earnings that provided the cash to pay the dividends were already taxed at the corporate level.

Question: What is Earning Stripping?

Answer:

Earnings Stripping is the Practice of reducing the taxable income of a corporation by paying excessive amounts of interest to related third parties.

Question: What is Effective Tax Rate?

Answer:

Effective  Tax rate is  percentage of Actual income tax paid divided by net taxable income before taxes. It is the rate at which a taxpayer would be taxed if his tax liability were taxed at a constant rate rather than progressively.

Question: What is Environmental Tax?

Answer:

Environmental Tax is a tax imposed for environmental reasons, e.g. to provide an incentive to reduce certain emissions to an optimal level or taxes on environmentally harmful products.

Question: What is Excise Tax?

Answer:

 Excise tax is an inland tax on the production for sale or sale of a specific good within the country.  An excise tax can be a per unit tax or an ad valorem tax. The first is a fixed amount of tax per item, whereas the second is a percentage of the value of the item .Excise Tax is more commonly known as Excise Duty.

Question: What is Expatriation Rules in Tax?

Answer:

Expatriation Rules  is the Rules under which a taxpayer continues to be subject to tax when he relinquishes his residence or his citizenship in order to avoid tax.

Question: What is Export Duty?

Answer:

It   is the Tax levied on exports of basic commodities entering into world trade, such as rubber, copper, palm oil, sisal, tea, cocoa and coffee

Question: What is Foreign Exchange Tax ?

Answer:

 It  is the  special tax imposed on transactions involving sales of foreign exchange by domestic banking institutions and authorized exchange brokers.

Lesson -1 on Tax

Question: What is Tax?

Answer:

Tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state.

Question: What is Tariff?

Answer:

Tariff is a charge for movement of goods through a political border. Tariff is also name as Custom Duty.

Question: What is VAT?

Answer:

VAT stands for Value Added Tax. It is also known as “Goods and Services Tax” (GST)

Question: What is Withholding Tax?

Answer:

Withholding Tax is a tax deduction at source, required to be remitted by the employer to the tax authorities on behalf of the employee

Question: What is Asymmetric Taxes?

Answer:

A situation wherein participants in a transaction have different net tax rates.

Question: What is Capital Tax?

Answer:

Capital Tax is a tax based on capital holdings, as opposed to a capital gains tax.

Question: What is Deferment of Tax?

Answer :

Deferment of Tax is the postponement of tax payments from the current year to a later year.

Question: What is Direct Tax?

Answer :

Direct Tax is the taxes imposed on income, capital gains and net worth. Gift tax, death duties and property tax are also considered direct taxes.