2020-09-24
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1 HMRC A A court of the law, at the federal or state
level, that deals with tax disputes in the US.
On the federal level the court hears cases
between taxpayers and the Internal Revenue
Service (IRS). The court is a part of the
legislative branch of the federal government,
not the judicial branch.
2 Tax Court B Any government entity that is authorized by
law to assess, levy and collect taxes.
3 Tax authority C The U.S. government agency authorized to
collect federal income taxes and enforce the
tax laws embodied in the IRS Code
4 Internal Revenue D A non-ministerial department of the UK
Service Government responsible for the collection
of taxes, the payment of some forms of state
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support and the administration of other
regulatory regimes including the national
minimum wage.
Exercise 8.
Complete these sentences using the following words.
tax authority obtained value added tax software incentives
business parameters limitations import deductions
fiscal obliged
1. Congress and the Internal Revenue Service have laid down certain ___________ that an organization must follow in order to qualify as a nonprofit corporation.
2. A foreign company is __________ to register with the tax authorities within 30 days after start of business activities in Russia through a separate subdivision.
3. If you want to buy a lot of products you must know what the ________ will be on it.
4. A corporation is viewed as a completely separate tax entity in the Internal Revenue Service's eyes, so your business can take tax _________ just as an individual would.
5. Since 2014 taxpayers are obligated to submit their VAT returns electronically via the special _________.
6. At this stage you can obtain a Tax Identification Number from the Internal Revenue Service, as well as from your state's ___________.
7. A company carrying out commercial activities in Russia in the absence of tax registration may be penalized in the amount of 10 percent of income __________ from such activities, but not less than 40,000 Rubles.
8. A separate VAT return should be submitted in respect of the _______ goods by a Russian company from another country in the Customs Union between Russia, Belorussia and Kazakhstan.
9. The people were subject to the value added tax which was to be expected as the state deserves some share of the ___________ transactions.
10. VAT on representation expenses and on business trips can be recovered within the established limits. No other _________ exist.
11. There are VAT incentives for small businesses with revenue less than 2 mln Rub within 3 months or that apply special tax regimes. Also, there are VAT ___________ for participants of R&D and commercialization project in Skolkovo innovation centre.
12. Last week, the state reported that tax collections are up 11.5% for this ________ year.
UNIT EXTENSION
Exercise 9. Two-minute presentation.
Choose one of the following subjects about VAT collection and prepare to give a two-minute presentation about it to the group.
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· VAT collection – the Basics
· Problems of VAT collection
· Efficiency of VAT collection in Russia
· Rates and registration for VAT
· Could banks become VAT collection agents?
· VAT collection and Social Security contribution: is there a link?
· International transactions and foreign traders for VAT
· VAT in Europe
· VAT in developing and transitional countries
PART 2
TOPIC FOCUS: Capital Gains Tax
Discuss these questions with a partner.
1. What are different ways in which companies can earn money?
2. What is ‘disposal of assets’?
3. What are capital assets?
4. Why do governments impose Excise Taxes?
5. What form of taxation do governments use to protect domestic products?
A company or individual can generate income in a number of ways – through sales of merchandise, provision of services, renting property, trading securities or lending money to other enterprises. In addition to its core activities, a company can also earn income through disposal of assets other than inventory, or capital assets.The profit made by the sale of capital asset is called capital gain. The tax levied on profit which is a result of sale of capital asset is called Capital Gains Tax.
Capital Gains Tax is levied when a taxpayer disposes of an asset that is worth more on disposal than when it was acquired. The most common capital gains are realized from the sale of stocks, bonds, land, property and business assets such as goodwill.
For example, when a company or individual buys securities for $ 1,000 and later sells them for $ 2,000, the difference ($ 1,000) is subject to Capital Gains Tax. There are several ways in which a disposal can be made, including when an asset is sold, given away or exchanged. For Capital Gains Tax purposes an asset can be any form of property, unless local tax legislation stipulates otherwise.
The amount of Capital Gains Tax is computed by deducting the acquisition costs of an asset and enhancement expenditurefrom the consideration (or sale proceeds) received from a disposal.
Not every increase in price of assets held by a company or individual results in tax liability. If the price of security held by a company increases, but the company decides not to sell, the gain is not realised and, therefore, nor subject to taxation. Capital Gains Tax are only triggeredwhen an asset is realised, not while it is held by a company or individual. An entity can own shares that appreciateevery year, but still not be liable for paying Capital Gains Tax on the shares until they are sold.
However, the price of securities or property does not always go up. When the price of securities goes down, a company or individual that holds securities incurs losses. Capital losses are then used to offset capital gains of the same type in order to reduce a company’s tax liability. If the losses exceed the gains of the same year, the excess amount may be carried forward against the gains of later years.
Exercise 1.
