Vocabulary list

A. taxation n налогообложение, взимание налогов

compulsory adj обязательный, принудительный

tax on income подоходный налог

tax on wages налог на заработную плату

tax on salary налог на жалование служащих

tax on profits налог на прибыль

tax on dividends налог на дивиденды

tax on rent налог на рентные платежи

tax on interest налог на процентный доход

tax on capital налог на капитал

direct taxes прямые налоги

indirect taxes косвенные налоги

interest payments процентные платежи

municipal services муниципальные услуги

to give effect (to) осуществлять, приводить в исполнение, проводить в жизнь

welfare of the community благосостояние общества

inequality of incomes неравенство доходов

equally равенство

forms of taxes виды налогов

treat v обращаться, обходиться

levy v облагать налогом

corporate income tax налог на корпоративный доход

impose v облагать (пошлиной, налогами ), налагать

double tax burden бремя двойного налогообложения

after-tax income доход после удержания (за вычетом) налога

stock-holder n акционер, держатель акций

personal income личный доход

code n кодекс

tax law налоговое законодательство

body of tax legislation содержание налогового законодательства

Finance Act финансовый акт

operate v (зд.) использовать, пользоваться

tax assessments установление налоговых ставок; определение размера облагаемого налогом дохода

return n налоговая декларация

to issue a return выдать налоговую декларацию

Board of Inland Revenue ("Inland Revenue") Налоговая служба Великобритании

to complete a return заполнить налоговую декларацию

submit v представлять

annual accounts годовой отчет; (зд.) финансовая отчетность

computation n расчет, вычисление

taxable profit налогооблагаемая прибыль

system of self-assessment система, при которой размер облагаемого налогом дохода определяется самим налогоплательщиком

capital gains доход от прироста капитала

foreign investment иностранные капиталовложения

taxable permanent establishment постоянно работающее предприятие, облагаемое налогом

tier n уровень, ярус

value-added tax (VAT) налог на добавленную стоимость

securities tax налог на ценные бумаги

withholding tax налог с суммы дивидентов

audit v подвергать(ся) аудиторской проверке

tax authorities налоговые органы

to lodge an appeal подавать апелляционную жалобу

resident adj проживающий, постоянно находящийся в стране

domicile v поселиться на постоянное место жительства

seek (sought) v искать, стремиться

mitigate v смягчать, уменьшать

double taxation двойное налогообложение

double tax treaty договор об избежании двойного налогообложения

arrangements n (зд.) меры, мероприятия

prevent v препятствовать, мешать, предупреждать

evasion of tax obligations уклонение от налоговых обязательств

avoidance n уклонение

tax liability обязательства по уплате налогов

B. Dialogue taxation in russia

Foreigner: I hear that many Russians complain that taxes are too high in Russia, personal income tax, for example.

Russian: I can't agree with you here. The existing 12% income tax on personal income under 20 thousand roubles a year is not too heavy.

F.: There are many rich people in Russia now. How are higher incomes taxed?

R.: Progressive income tax is applicable in such cases. The larger the income, the bigger proportion of it is paid as tax.³ The upper limit of the tax rate is 35% at the moment.

F.: Oh, I must say that in many countries personal income taxes are also rather high. Can the same be said about taxes levied on businesses?

R.: The tax rate depends, first of all, on the form of business, on what each particular business is involved in. Juridical persons involved in entrepreneurial activities pay 13% to the federal budget and up to 25% to the regional budget.

F.: Do businesses involved in intermediary activities, including stock exchange activities, banking and insurance pay similar taxes?

R.: No, such businesses pay taxes on profit at a rate of 43%.

F.: Well, your profit tax is also comparable to other countries' taxes, isn't it?

R.: Yes, but the tax burden on businesses is too high, because along with the profit tax, enterprises pay VAT, excise tax, property tax and other local taxes. They also pay charges to the Pension Fund, Employment Fund, and Social Insurance and Medical Insurance Funds.

F.: VAT and excise are indirect taxes which are levied on transactions and are included into the selling price. They are paid by consumers and not by producers.

R.: Yes, you are absolutely right, but higher prices often cause sales problems.

F.: As to the VAT, do you use a flat rate for all goods?

R.: No, a reduced rate of 10% is applicable to foodstuffs and goods for children.

F.: In this connection, are there many tax allowances in Russia now?

R.: Quite a lot, but in the situation of growing tax evasion the government plans to do away with many tax breaks.

F.: Besides, as far as I know, there is a good deal of anxiety because the existing privileges for small businesses are under a big question mark.⁴

R.: Right. The majority of tax allowances have already been eliminated. Now small businesses have two alternatives. They either pay an imputed tax on income or pay taxes in the established order under which they have some tax deferments.

F.: These privileges deprive the state budget of some amount of revenue, don't they?

R.: Yes, but they are insignificant compared with the enormous sums that the industrial giants owe in taxes.

F.: The government must provide a clear-cut and stable legislative base for small businesses, I think.

R.: Not only for small businesses. All people suffer from hasty, ill-considered decisions which adversely affect millions of people.

F.: Is there any discrimination against foreign companies in Russia?

R.: No, Russian business legislation provides that a company should pay tax at the same rate whether it is foreign or Russian.

F.: And what about foreign companies that earn income from renting equipment or making loans to Russian companies?

R.: Lower rates are applicable in such cases. Taxes are a powerful instrument. They must be used to support not to stifle business.

F.: Foreign experience can be of help here.

R.: No doubt. The Taxation Ministry of Russia is cooperating closely with its Western counterparts to borrow Western experience.

В. progressive income tax прогрессивный подоходный налог

applicable adj применимый, пригодный, подходящий

comparable adj сравнимый

excise tax акциз, акцизный налог

charge n сбор, отчисление

Pension Fund Пенсионный фонд

Employment Fund Фонд занятости

Social Insurance Fund Фонд социального страхования

Medical Insurance Fund Фонд медицинского страхования

selling price продажная цена

sales problem проблема сбыта

flat rate единообразная ставка

reduced rate льготная ставка

tax allowance налоговая льгота

tax break налоговая льгота

anxiety n беспокойство, обеспокоенность

imputed tax вмененный налог

tax deferment отсрочка налога

deprive v лишать

giant n гигант

owe v быть должным

clear-cut and stable legislative base четкая и стабильная законодательная база

hasty , ill-considered decisions скороспелые, плохо продуманные решения

adversely adv отрицательно, неблагоприятно

affect v сказываться

to earn income получать доход

to rent equipment сдавать оборудование в аренду

stifle v душить

Words you may need:

discount n скидка

perk n преимущество

refund v возмещать, возвращать

handling of the refund оформление возврата (налога)

cash-in-hand наличность

to qualify for refund получить право на получение возмещения

reclaim v требовать обратно

voucher n квитанция, ваучер

Words you may need:

reward v вознаграждать

tax base налоговая база

loophole n лазейка

stamp duty гербовый сбор

charge v взимать

advance corporation tax авансовый корпорационный налог

Words you may need:

excise duty акцизная пошлина, акциз

distinguish v проводить различие

relate (to) v быть связанным

entail v влечь за собой

counter-performance n ответное действие

via prep через

amount (to) v достигать, составлять

Words you may need:

embark (on) v приступать к чему-л.

comprehensive adj обширный; масштабный; всеобъемлющий

profound adj глубокий

disincentive n отрицательное воздействие

negate v сводить на нет

statutory adj основанный на законе

incorporate v включать

tax yield налоговый доход

Words you may need:

tax administration система сбора налогов, налоговое ведомство

self-employed business самостоятельное, некорпоративное предприятие

to locate evaders обнаруживать, выявлять уклоняющихся от уплаты налогов

widespread adj широко распространенный

prosecution n преследование

Tax Havens Explained

What do the Bahamas, Bermuda, Hong Kong, Liberia, the Netherlands, the New Hebrides, Panama, and Switzerland have in common? They are all "tax havens".

Essentially, a tax haven is a place where foreigners may receive income or own assets without paying high rates of tax upon them. Although, strictly speaking, not all tax havens are countries, we can refer to them as such here for the sake of convenience. In some havens the tax relief that foreigners enjoy stems from the absence of the chief forms of direct taxation – income, estate, and gift taxes; but in most countries the relief stems from special features of the tax system that result in a very low effective tax rate on certain forms of foreign investment.

Even though the list of tax havens includes several developed countries, most are developing countries. It is precisely their example that other developing countries are tempted to follow, in the hope that becoming a tax haven will help them solve some of their economic problems.

Tax haven operations consist fundamentally in establishing within a tax haven country one or more legal entities, such as trusts, personal holding companies, or corporate subsidiaries, and attributing to them income earned elsewhere in order that it should be taxed at the country's low rates-or perhaps not taxed at all. This objective is usually accomplished by either (1) accumulating income in the tax haven country at low rates of tax to be withdrawn later and invested elsewhere according to the investor's wishes; or (2) artificially shifting business profits from high-tax countries to a tax haven country.

Low tax rates are perhaps the principal attraction offered by tax havens. Usually these low rates are associated with income taxation; in fact, what springs to mind immediately upon hearing the words "tax haven" is the absence of income taxation that exempts foreign investors. Though it is true that many of the advantages offered by tax haven countries are income tax advantages, these are by no means the only benefit that these countries offer to foreign investors.

Within the tax field, the absence of other taxes such as estate, inheritance, and gift taxes may be as important to certain investors as the absence of an income tax. Bilateral tax treaties between a tax haven country and some of the major developed countries are another feature that may attract investors. The existence of a tax treaty allows third-country investors to base their holding companies in tax havens and obtain a reduction in withholding taxes applied to the dividends and interest they receive from developed countries with which the tax haven country has the tax treaty.

Strict and well-enforced rules of banking secrecy and, in general, the possibility of doing business without close supervision by government agencies are additional attractions usually offered by tax haven countries. Other factors, such as the low cost of doing business, the existence of liberal banking regulations, and the absence of exchange controls are also important. Finally, a good communications service, a well-developed legal system with an abundance of legal and accounting expertise, and, above all, a high degree of political and financial stability also help to make a country successful as a tax haven.

Words you may need:

tax haven налоговое убежище

strictly speaking строго говоря

for the sake of convenience из соображений удобства

tax relief налоговая льгота

enjoy v (зд.) пользоваться

to stem from происходить, проистекать из

estate tax налог на недвижимость

gift tax налог на дарение

to be tempted испытывать соблазн

trust n траст

holding company холдинговая компания

subsidiary n дочерняя компания

attribute v приписывать (кому-л.), относить (за счет/на счет чего-л.)

accomplish v осуществлять

accumulate v аккумулировать, накапливать

withdraw v (зд.) забирать, отбирать

artificially adv искусственно

shift v перемещать

to be associated (with) быть связанным (с)

what springs to mind первое, что приходит в голову

inheritance tax налог на наследство

exempt v освобождать от уплаты налогов

bilateral adj двусторонний

well-enforced (зд.) действенный

abundance n изобилие, избыток

Russian: I'm sure you know that one of the most serious problems in Russia now is poor tax collection causing sharp decline in tax revenue.

Foreigner. Yes, we know that and understand your concern. But tax evasion is characteristic of quite a number of countries. Inadequate tax law and weak control on the part of tax services make it possible for taxpayers to find loopholes and evade taxes.

R.: In Russia many individual taxpayers simply do not pay taxes. We can't put up with such a situation any longer, particularly because the government is planning to gradually move the tax burden from enterprises to incomes and property of physical persons.

F.: In that case you will have to work with your taxpayers.

R.: What do you mean?

F.: Sometimes individual taxpayers and businesses do not pay taxes or do not pay them fully because they do not understand the procedures of tax collection, they are unclear about filing tax returns.

R.: Are you facing a similar situation?

F.: In away, yes. But we in the US Internal Revenue Service (IRS) try to educate taxpayers, to provide them with information, to help them to comply with the tax laws.

R.: Our taxpayers, both individuals and legal entities, also often turn to employees of the Taxation Ministry for clarifications and explanations.

F.: It's usual practice. Besides, we invite people to attend our educational programmes designed for specific groups of taxpayers, we make available special publications which explain the many rights of taxpayers, procedure of appeal and seizures, etc.

R.: The staff of the IRS must be very big.

F.: No, not very. The purpose of the IRS is to collect the amount of tax revenue at the least cost, so we increasingly work in cooperation with local volunteers, who offer free help in preparing tax returns, for instance, for elderly taxpayers.

R.: You are operating the "self-assessment" system, aren't you?

F.: Yes, we accept most taxpayers' returns as filed. Sometimes, however, we select returns for examination.

R.: Do you check dishonest taxpayers?

F.: No, the check doesn't suggest that the taxpayer is dishonest. We check returns to make sure the math is accurate and see if the taxpayer has paid the correct amount of tax.

R.: And what if the taxpayer has not paid the full amount of tax? What measures are taken?

F.: If a taxpayer owes tax, IRS employees will send the taxpayer a bill describing the tax and stating the amount the taxpayer owes in tax, interest and penalties.

R.: Is the taxpayer given a specific period of time to pay the bill in full?

F.: Yes, we do not take any enforcement action until after we have given the taxpayer the chance to voluntarily pay the tax due.

R.: What enforcement measures can be taken if the defaulting taxpayer does not respond?

F.: As a rule we place a tax lien on the property to secure the amount of tax due. The lien is released no later than 30 days after we find that the entire tax is paid.

R.: What rights do taxpayers have if they disagree with an IRS decision, for instance the amount of tax due?

F.: The taxpayer has the right to appeal our filing if he or she believes that the amount is wrong or the lien was filed in error.

R.: The taxpayers have the right to recover the actual economic damages sustained, I suppose, don't they?

F.: Yes, sure. One of the goals of the IRS is to protect the rights of American taxpayers, so that they have confidence in the integrity, efficiency and fairness of our tax system.

R.: Yes, taxpayers have the right to be treated fairly, professionally, promptly and courteously. Our tax employees also do their best to serve the public by continually improving the quality of services.

Words you may need:

loophole n лазейка

to file a tax return подавать налоговую декларацию

IRS (Internal Revenue Service) Налоговая служба США

comply (with) v выполнять требования

appeal n апелляция

seizure n наложение ареста на имущество, изъятие имущества

the math is accurate расчет произведен правильно

enforcement actions принудительные меры

defaulting taxpayer налогоплательщик, нарушивший закон

tax lien залоговое право на имущество в обеспечение уплаты налогов

the lien was filed in error право удержания имущества было применено ошибочно

to recover damages взыскивать убытки

integrity n честность, профессиональная репутация

promptly adv без задержки , незамедлительно

courteously adv учтиво, обходительно, вежливо

Tax System Design

Recent studies have singled out some of the desired features of the tax system that should emerge as countries develop. They are as follows:

• Concentration of revenue sources. A system that raises revenue from a limited number of taxes and rates may substantially reduce administration and compliance costs. Avoidance of numerous taxes may also facilitate the assessment of the effects of policy changes and avoid an impression of excessive taxation.

• Broad and objectively defined tax bases. A broad tax base with limited exemptions enables revenue to be raised with relatively low rates. Substantial erosion of the tax base through exemptions requires much higher rates to achieve a given amount of revenue. Tax bases should be defined so as to ensure that producers and consumers can clearly estimate their tax liability when they plan activities.

• Minimization of collection lags. In an inflationary environment the real value of tax receipts may decline substantially when there are long lags in payments. High penalties are necessary to ensure that legal delays are not compounded by delinquency lags.

• Tax neutrality. The tax system should finance government operations with the least cost and disturbance to the patterns of production, and the generation and use of income. Hence, neutrality of the tax system is considered desirable, in the sense that distortions in incentives should be limited unless there are compelling reasons to discourage the production, consumption or trade of a particular commodity. The activity, most profitable before tax, should remain most attractive after tax.

Based on: Macroeconomic Adjustment, IMF Institute

Words you may need:

administration costs (зд.) расходы, связанные со сбором налогов

compliance costs (зд.) расходы, связанные с обеспечением соблюдения налогового законодательства

tax liability налоговые обязательства

lag n разрыв, запаздывание

penalty n штраф

compound v усложнять, увеличивать

delinquency n правонарушение

neutrality n нейтральность

disturbance n нарушение

Slovakia

Major Sources of Revenue for the Local Government Budget

The principle sources of revenue available to local governments are local taxes and fees, revenues from municipal property, a share of centrally collected taxes and transfers from the central government.

Municipalities levy and collect the local tax and local fees. In a new system of national taxation introduced in 1993 the real estate tax was assigned to local governments. The real estate tax base includes land and buildings. The tax rate is based mainly on areas (square metres of different types of property).

Legislation currently provides Slovak municipalities with a total of eleven separate local fees which can be employed to generate local revenues. There are ceilings on the levels of fees which can be set, but these levels, and whether particular fees are imposed, are discretionary.

The sharing of revenues is regulated by law. Municipalities receive a share of the national government's total tax revenue, generally distributed on per capita basis. Which taxes are shared, and the proportions shared, are settled by the Act on the State Budget every year. In 1994 there were three shared taxes:

• a 29.92 per cent share of income tax on wages which is distributed to municipalities according to the number of inhabitants;

• a 5.87 per cent share of income tax of legal entities which is distributed to municipalities according to the number of inhabitants multiplied by a coefficient depending on the size of the municipality;

• a 30 per cent share of road (motor vehicle) tax collected for the tax administration area which is redistributed to municipalities within the area, the precise share for each municipality being equivalent to their share of the total population for the area. It is dedicated to the building, repair and maintenance of local roads.

The central state budget also provides specific subsidies to support certain activities in municipalities with up to 5,000 inhabitants. The amount of such subsidies is based on the size of population multiplied by coefficient of agricultural land quality. There are also subsidies from the central state budget for the operation of city public transport (in four cities only).

Formerly, there were substantial amounts of government aid for capital investment in infrastructure. Among these were funds for development programmes and for financing the completion of housing complexes begun before 1989. But at present, there are no specific capital grant programmes, except for city public transport (in the four cities), and ad hoc subsidies from specific state funds such as the State Environment Fund.

The share of subsidy payments to local governments in the state budget was 1.28 per cent in 1993. Municipalities may raise credit without having to apply for permission. They are able to borrow from the capital markets.

Local governments may finance capital expenditure through municipal bonds. Generally, there are two ways: either the municipality issues its own bonds, or a bank issues and sells municipal bonds and uses the proceeds to purchase the debts of the local government. In both cases the municipality guarantees the debt with its property.