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. Show 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 ADVANCE PRICING ARRANGEMENT (APA) -- An arrangement that determines, in advance of controlled
transactions, an appropriate set of criteria (e.g. method, comparables and appropriate adjustments thereto, critical assumptions as to future events) for the determination of the transfer pricing for those transactions over a fixed period of time. An advance pricing arrangement may be unilateral involving one tax administration and a taxpayer or multilateral involving the agreement of two or more tax administrations. -B- BACK-TO-BACK
LOAN -- Method of borrowing between related parties where a loan is channelled through an independent third-party intermediary. -C- CAPITAL ASSETS -- All property held for investment by a taxpayer. -D- DAMAGES -- The amount received (other than
worker's compensation) through prosecution of a legal suit or action based on tort or tort-type rights, or through a settlement agreement entered into in lieu of such prosecution. -E- EARNED INCOME -- Income or compensation derived from personal services in an employment, trade, business, profession or vocation. (cf. investment income) 1. The extent of a person's beneficial ownership of a particular asset. This is equivalent with the value of the asset minus the liability to which the asset is subject. 2. Paid-in capital plus retained earnings in a corporation 3. The ownership interest possessed by shareholders in a corporation - stock as opposed to bonds. -F- FACTORING -- Financial transaction whereby an enterprise sells its debt-claims to a third party in order to obtain cash (although less than the full amount of the debt). The
third party then assumes responsibility for the administration and collection of the debt on the due date for its own account. -G- GAAP -- Generally
Accepted Accounting Principles are the rules and practices required to be followed in keeping financial records and books of account. GOODWILL
-- Intangible asset which consists of the value of the earning capacity, location, marketing organization, reputation, clientele, etc. of a trade or business. Goodwill can be transferred for a consideration to another entrepreneur upon the sale of the business as a going concern. -H- HABITUAL
ABODE -- In the context of the tie-breaker rule of the OECD model tax treaty, habitual abode is one of the criteria used to resolve the problem of dual residence. It refers to the period of time a taxpayer spends in each country. -I- IMF -- See: International Monetary Fund -J- JEOPARDY ASSESSMENT -- Tax assessment made where there is some danger of tax being lost. -K- -L- LANDED COST -- Term used in relation to the importation of goods which means the sum total of the cost of the goods concerned, the amount of customs duties levied on those goods and the expense incurred in unloading them. LIMITED
LIABILITY -- Liability of investor which is limited to the extent of his investment -M- MAINTENANCE EXPENSES -- 1. Expenses incurred by a taxpayer to
provide for his family, former spouse or other relatives. 2. Expenses for the upkeep or preservation of a building or equipment. -N- NATIONALITY PRINCIPLE -- The nationality of a taxpayer may affect the manner in which he is taxed and the nature of his tax burden, but comprehensive income tax treaties commonly provide that foreign taxpayers should not suffer discriminatory taxation by reason of their nationality. -O- OECD -- The OECD (Organization for Economic Co-operation and Development) is a multilateral organization comprised of 30 countries, which are mostly Western European countries and other industrialized countries including US and Japan. Founded in 1961, the OECD provides a forum for representatives of countries to discuss and attempt to coordinate economic and social policies. It has an especially significant role in international tax matters. Its website is www.oecd.org. OECD MODEL TAX TREATY -- See: Model tax treaty -P- PAID-IN CAPITAL -- The capital received by a corporation from investors for stock, as distinguished from capital generated by earnings or donated. Some countries treat a partnership as a separate taxpayer and may subject it to tax on its income and losses as a corporation. Other countries do not consider a partnership to be a separate legal entity and the partnership is treated as tax transparent, with each individual partner being taxed on his share of the profits according to his interest in the partnership. Taxation of partnerships is addressed in the Commentary to Article 1 of
the OECD Model. -Q- -R- RAMSAY CASE -- The Ramsay case (W.I. Ramsay Ltd. v. IRC, Eilbeck (Inspector of Taxes)
v. Rawling), decided by the UK House of Lords in 1981, involved complicated tax avoidance scheme which were marketed in the UK in the 1970s. The case established that a series of transactions with the purpose of tax avoidance, which ultimately cancelled each other out, could be ignored for tax purposes. -S- SAFE HARBOUR -- Where tax authorities give general guidelines on the interpretation of tax laws, these may state that transactions falling within a certain range will be accepted by the tax authorities without further questions. -T- TANGIBLE PROPERTY -- Property with a physical form, e.g. personal property, real property
as distinguished from intangible property. -U- UNCONTROLLED TRANSACTION -- Transaction between independent and unrelated enterprises. -V- VALUATION PRINCIPLES -- Tax law principles regarding valuation of business and non-business assets, and inventory. -W- WAGE
TAX Tax -- levied at source as a withholding on wages; taxes thus withheld are usually offset against final income tax liability (if any). -Z- What are gross receipts for a California business?Generally, gross receipts is all revenue that your business received during a given year from: Sales of goods. Provision of services. Other income producing assets or activities.
What is considered gross receipts for a business?Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses.
Does California have a gross receipts tax?California Gross Receipts Tax
In addition to a yearly $800 minimum franchise tax fee that is required of all California corporations or limited liability companies, there is also a gross receipts tax that is charged on every California LLC. Note that this tax is not imposed on the California corporation.
What is the gross receipts tax rate in California?The statewide tax rate is 7.25%. In most areas of California, local jurisdictions have added district taxes that increase the tax owed by a seller. Those district tax rates range from 0.10% to 1.00%.
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