Discussion

1. Work in pairs and divide the following styles of behaviour into pairs of opposites:

a) being group oriented

b) being cautious and careful

c) being decisive and able to take rapid individual decisions

d) being individualistic

e) being assertive, authoritative, ruthless and competitive

f) being happy to take risks

g) being good at listening and sensitive to other people’s feelings

h) being intuitive

i) being logical, rational and analytic

j) liking consensus and conciliation

2. Which five of the above styles do you think are generally preferable for

managers?

3. Now look at the following list of qualities. Work in pairs and decide which are

the most important for a manager:

k) being competent and efficient in one’s job

l) being friendly and sociable

m) being a hard worker

n) being persuasive

o) having good ideas

p) being good at communicating

q) being good at motivating people

r) being good at taking the initiative and leading other people

4. Make a list of the five most important qualities from (a) to (r).

5. Which of these qualities do you think you have? Which do you lack? Which

could you still learn? Which do you have to be born with?

UNIT 9. TAXATION

Assignment 1. Remember the meaning of the following words and word-combinations:

taxation compulsory public authority tax on income tax on wages tax on salary tax on profit tax on dividends tax on rent tax on interest tax on capital direct taxes commodity indirect taxes fiscal budgetary revenue municipal services to give effect (to) welfare of community inequality of incomes forms of taxes treat levy proprietorship partnership legal entity foreign investment tier value-added tax (VAT) excise tax charge Pension Fund Employment Fund Social Insurance Fund Medical Insurance Fund securities tax withholding tax tax allowance = tax break tax return audit

налогообложение, взимание налогов обязательный, принудительный орган государственной власти подоходный налог налог на заработную плату налог на жалование служащих налог на прибыль налог на дивиденды налог на рентные платежи налог на процентный доход налог на капитал прямые налоги товар косвенные налоги финансовый бюджетный доход муниципальные услуги осуществлять, приводить в исполнение благосостояние общества неравенство доходов виды налогов обращаться, обходиться облагать (налогом) собственность товарищество, компания юридическое лицо иностранные капиталовложения уровень, ярус налог на добавленную стоимость(НДС) акциз, акцизный налог сбор, отчисление Пенсионный фонд Фонд занятости Фонд социального страхования Фонд медицинского страхования налог на ценные бумаги налог с суммы дивидендов налоговая льгота налоговая декларация подвергать (ся) аудиторской проверке

tax authorities evasion of tax obligations eliminate avoidance deprive tax liability

налоговые органы уклонение от налоговых обязательств устранять, исключать уклонение лишать обязательства по уплате налогов

Assignment 2. Practice the pronunciation of the following words:

towards the expenditure, public authority, government revenues, direct taxes, commodities, fiscal, budgetary, national debt, various, proprietorship, partnership, to create a climate, to thrive, burden, to eliminate, tax allowances, to deprive, juridical persons, entrepreneurial activity, to levy taxes, tier, to pay charges, excise tax, social insurance, legal entities, tax authorities, illegal evasion, tax liability.

Assignment 3. Read and translate the text using a dictionary.

WHAT ARE TAXES?

Taxes are a compulsory financial contribution by a person or body of persons towards the expenditure of a public authority. In modern economies taxes are the most important source of government revenues. Taxes on income (i.e. on wages, salaries, profits, dividends, rent and interest) and on capital are known as "direct" taxes. Taxes on commodities or services are known as "indirect" taxes.

Taxes are considered to have three functions:

(a) fiscal or budgetary, to cover government expenditure, to provide the public authorities with the revenue required for meeting the cost of defence, social services, interest payments on the national debt, municipal services, etc.;

(b) economic, to give effect to economic policy, to promote stable economic growth, to influence the rate of economic growth of the nation;

(c) social, to increase the economic welfare of the community, to lessen inequalities in the distribution of income and wealth.

Businesses and individuals are subject to many forms of taxes. The various forms of business organization are not taxed equally. The tax situation is simplest for proprietorships and most partnerships; corporations or companies are treated differently.

Under Russian law, all Russian legal entities, whether they have foreign investment or not, are subject to the profit tax law. Juridical persons involved in entrepreneurial activities pay 6,5% to the federal budget and 17,5% to the regional budget. Along with the profit tax, enterprises pay value-added tax (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.

Russian taxes provide revenue for three tiers of the budget: federal, regional and local. The major taxes paid to the budget are: profit tax; value-added tax (VAT); securities tax; withholding tax. 18% 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. A reduced rate of 10% is applicable to foodstuffs and goods for children.

The Russian^, government tries to create a climate in which business can thrive, to keep the tax burden as low as possible. It also attempts to eliminate tax allowances, which deprive the budget of tax revenues, and to improve tax collection.

Tax returns for Russian legal entities are audited by the tax authorities at the time they are submitted. .

Along with cases of illegal evasion of tax obligations there are entirely legal ways of avoidance by which a person may so arrange his affairs as to minimize, or even eliminate, tax liability on his property and income.

Assignment 4. Find English equivalents to the following phrases in the text:

группа людей; на расходы органов государственной власти; налоги на товары и услуги; для обеспечения (покрытия) правительственных расходов; чтобы покрыть расходы на оборону; государственный долг; чтобы обеспечить стабильный экономический рост; темпы экономического роста; экономическое благосостояние общества; сократить неравенство; подчиняются закону о налоге на прибыль; занимающиеся предпринимательской деятельностью; вместе с налогом на прибыль; оплачиваются потребителями; льготная ставка; три уровня бюджета; бизнес может процветать; снизить (сократить) налоговое бремя; сократить налоговые льготы; налоговая декларация; помимо случаев ….. существуют

Assignment 5. Complete the sentences in column A choosing the proper ending from column B:

A B

1) Taxes are the most important source a) indirect taxes.

of ……………..

2) Taxes on income and capital are b) promote stable economic growth

known as ………….. and influence the rate of it.

3) Taxes on commodities and services c) deprive the budget of tax

are called ………….. revenues.

4) Taxes fulfill a fiscal or budgetary d) profit tax, VAT, securities tax

function: they cover ………….. and withholding tax.

5) The economic function of taxes is e) tax authorities

to ……………

6) The social function of taxes is to … f) government revenues.

……………

7) The major taxes paid to the budget g) direct taxes.

are …………..

8) The government tries to eliminate h) government expenditures, provide

tax allowances, because they …… the revenue for meeting the cost of

defence and social services.

9) Tax returns for legal entities are i) increase economic welfare of the

audited by ………….. community.

Assignment 6. Answer the questions on the text:

1) What are taxes?

2) What taxes are called “direct” and “indirect”?

3) What are the purposes of direct and indirect taxation?

4) What are the main functions of taxes? Characterize briefly each of them.

5) Are businesses taxed equally?

6) What taxes are paid to the federal budget?

7) How much do legal entities pay to the federal budget and to the regional

budget?

8) What charges do juridical persons pay?

9) How do VAT and excise tax differ from other taxes?

10) What bodies collect taxes?

11) Why does the Russian government try to eliminate tax allowances?

12) What is the difference between tax evasion and tax avoidance?

Assignment 7. a) Supply the articles where necessary.

b) Write down 3-5 questions on the text.

c) Say what you have learnt about the system of tax

administration in the UK.

The British government’s programme of tax reform has sought to maintain ….. climate in which business can thrive and individual initiative is rewarded. Its major aims are …. following: to keep …. tax burden as low as possible through firm control over public expenditure, to maintain …. broad tax base, which helps to keep tax rates low, and to shift …. balance of taxation from taxes on income to taxes on expenditure. Steps have been taken to close tax loopholes. …. government is committed to simplifying …. administration of …. tax system, both for individuals and for companies. The government admits that there are four general principles for …. efficient administration of a tax system: …. clarity, continuity, cost-effectiveness and convenience.

At present, the Inland Revenue assesses and collects …. taxes on income, profits and capital, and stamp duty.

Taxes on individual incomes are generally progressive in that larger incomes bear …. greater amount of tax.

In general, income tax is charged on all income that originates in …. Britain and on all income arising abroad of people resident in Britain. Some forms of income, however, are exempt.

Britain has entered into …. agreements with many countries to provide relief from double taxation. Most wage and salary earners pay their income tax under a Pay-As-You-Earn (PAYE) system whereby tax is deduced and accounted for to the Inland Revenue by the employer.

The rates of company tax in Britain are lower than in …. most other industrialized countries. A company which distributes profits to its shareholders is required to pay advance corporation tax (ACT) on these distributions to …. Inland Revenue.

Words you may need:

reward – вознаграждать

tax base – налоговая база

loophole – лазейка

stamp duty – гербовый сбор

charge – взимать

advance corporation tax – авансовый корпорационный налог

Inland Revenue – Управление налоговых сборов

Assignment 8. Translate the following text in writing using a dictionary.

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

The US Internal Revenue Service (IRS) employees try to educate taxpayers , to provide them with information, to help them to comply with the tax laws. The staff of the IRS is not very big. The purpose of the IRS is to collect the amount of tax revenue at the least cost, so employees increasingly work in cooperation with local volunteers, who offer help in preparing tax returns, for instance, for elderly taxpayer.

Most taxpayers’ returns are accepted as filed. Sometimes, however, some returns are selected for examination. The returns are checked to make sure the math is accurate and see if the taxpayer has paid the correct amount of tax. 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.

Words you may need:

loophole – лазейка

to file a tax return – подавать налоговую декларацию

IRS (Internal Revenue Service) – Налоговая служба США

comply (with) – выполнять требования

the math is accurate – расчет произведен правильно

Assignment 9. Speak on the following:

1. Taxes and their functions.

2. Types of taxes.

UNIT 10. INDIRECT TAXES (VAT, EXISE DUTY)

Assignment 1. Remember the meaning of the following words and word-combinations:

indirect taxes tax on consumption value-added tax (VAT) levy (on) duty excise duty entail counter-performance via revenue provide (for) in contrast (to) restrict account (for) premises amount (to) distinguish charge relate (to) goods refund, v	косвенные налоги налог на потребление налог на добавленную стоимость (НДС) облагать (налогом) пошлина акцизная пошлина, акциз влечь за собой ответное действие через, посредством ч-л доход предусматривать в отличие (от) ограничивать (зд.) являться причиной недвижимость составлять проводить различие, различать сбор быть связанным (с) товары возмещать, возвращать
handling of the refund cash-in-hand qualify for refund reclaim voucher	оформление возврата (налога) наличность получить право на получение возмещения требовать обратно квитанция, ваучер

Assignment 2. Practice the pronunciation of the following words:

special tax, levy taxes, consumption, excise duties, counter-performance, via the state budget, finance, revenue, charges, true sense, purpose, in a desirable direction, society, pesticides, insecticides, recent, health and environmental reasons, amount to, Germany, Sweden, Denmark, the UK (the United Kingdom of Great Britain and Northern Ireland), the EU (the European Union), available, purchase price, purchasing, added fee, tourists, voucher

Assignment 3. Read and translate the text using a dictionary.

INDIRECT TAXES

Indirect taxes are divided into general and special taxes on consumption. The general tax on consumption, value-added tax, or VAT, is levied on more or less all products and a large number of services. The special taxes on consumption are, on the other hand, levied on specifically selected products and services. For historical reasons, they are generally known as excise duties.

Payment of a tax does not entail any direct counter-performance on the part of the state. The revenue from taxation is used - via the state budget - to finance all government activities, including defence and the education system, for instance.

In the case of excise duties, the government does not provide any specific services for those who pay these taxes. The revenue from excise duties is stated to the state budget. Therefore, these excise duties, even though they are sometimes called charges are in reality taxes in the true sense of the word.

In contrast to other taxes, excise duties can also be used as instruments to influence consumption patterns in a desirable direction for the society. The introduction of an excise duty is, as a rule, based on both public finance requirements and other political considerations. The taxes on spirits, wine and tobacco are typical examples of excise duties used as instruments of influence. The charge on pesticides and insecticides is another, more recent example of an excise duty which was introduced in Sweden to restrict the usage of pesticides and insecticides for health and environmental reasons.

In Sweden excise duties now account for a significant proportion of the state's revenue. The annual cost to the Swedish government of administering excise duties (personnel, premises, computers, etc.) amounts to 0.06 per cent of the total revenue from these taxes.

As far as payments to the state are concerned, it is common to distinguish between taxes and charges. A charge usually relates to the provision of a particular service or function of the state. The charges paid to obtain a driving licence or a passport are typical cases.

Most goods are sold with VAT included in the selling price. This ranges from 7 per cent for some goods in Germany to 25 per cent in Sweden and Denmark. In the UK, VAT stands at 17.5 per cent. The Value-Added Tax normally included in the price of goods is refunded when leaving the EU. After purchasing any goods ask for the Tax-free Shopping Voucher which you need to reclaim your VAT. When you leave the EU the vouchers must be stamped at customs and all your purchases shown to them. The vouchers can then be cashed at the Refund Points. However, visitors only get the saving of 14.8 per cent on the purchase price as there is an added fee for handling of the refund.

The main difference between duty-free and tax-free shopping is that duty-free is available to everyone travelling within the EU. Tax-­free shopping, however, is only available to the non-EU members flying into European countries, which adds up to around 100 million tourists each year.

Tax-free shopping has become a big business with tourists from non-EU countries spending huge sums every year. It is a simple system which means you receive a cash-in-hand refund when you leave the country. There is often a minimum sale of between $ 30 and $100 to qualify for refund.

Assignment 4. Find English equivalents to the following phrases in the text:

общий налог (на); специальные налоги (на); что касается платежей; принято различать; предоставление конкретной услуги; чтобы получить водительские права; со стороны государства; через государственный бюджет; оборона; в случае (с); в истинном смысле слова; в отличие (от); чтобы повлиять на характер потребления; более новый пример; чтобы ограничить использование; из соображения их вредного воздействия на здоровье и окружающую среду; все Ваши покупки; могут быть обналичены; дополнительная плата (сбор); часто устанавливается минимальная стоимость (покупки).

Assignment 5. Complete the following sentences with the correct preposition:

1. Indirect taxes can be divided ………… two groups: general and special tax …..…….. consumption.

2. The general tax on consumption is levied ……….. almost all products and many services.

3. Most goods are sold with VAT included ………… the selling price.

4. VAT ranges …………. 7 per cent for some goods in Germany ………… 25 per cent in Sweden and Denmark.

5. ………… historical reasons the special taxes on consumption are called excise duties.

6. In the case of excise duties, the government doesn’t provide any specific services ………… those who pay these duties.

7. The revenue ………….. excise duties is stated ………….. the state budget.

8. In contrast ………….. other taxes excise duties can be used as an instrument to influence consumption pattern in a desirable direction …………… the society.

9. The taxes ………….. spirits, wine and tobacco are examples of excise duties used as instruments …………… influence.

10. In Sweden excise duties account ………….. a significant proportion of the state’s revenue.

Assignment 6. Answer the questions on the text:

1) What two groups are indirect taxes divided into?

2) How is the general tax on consumption called?

3) How are special taxes generally known?

4) What kind of products and services are general and special taxes levied on?

5) Where is the revenue from excise duties stated to ?

6) What is the difference between excise duties and other taxes? Give typical

examples of excise duties used as instruments of such influence.

7) What is the difference between taxes and charges?

8) Where is VAT included in?

9) What is the tax rate of VAT in different countries including Russia?

10) Is it possible to reclaim your VAT when leaving the EU? Describe the

procedure.

11) What is the main difference between duty-free and tax-free shopping?

Assignment 7. a) Read and discuss the text.

b) Sum up the text in 5-7 sentences and present your

summary in class.

c) Give your opinion on ‘tax havens’.

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. Even though the list of tax havens includes several developed countries, most of them are developing countries.

Tax haven operations consist 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.

Low tax rates are perhaps the principle attraction offered by tax havens. Usually these low rates are associated with income taxation. It is true that many of the advantages offered by tax haven countries are income tax advantages, but these are not the only benefit that these countries offer to foreign investors.

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.

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 important factors are the low cost of doing business, the existence of liberal banking regulations, and the absence of exchange controls. Finally, a well-developed legal system with an abundance of legal and accounting expertise, and a high degree of political and financial stability also help to make a country successful as a tax haven.

Words your may need:

tax heaven – налоговое убежище

strictly speaking – строго говоря

for the sake of convenience – из соображений удобства

trust – траст

holding company – холдинговая компания

subsidiary – дочерняя компания

attribute (to) – приписывать (кому-либо), относить (за счет/на счет ч-л)

to be associated (with) – быть связанным (с)

estate tax – налог на недвижимость

inheritance tax – налог на наследство

gift tax – налог на дарение

well-enforced – (зд.) действенный

abundance – изобилие, избыток

DISCUSSION

1. What is usually taxed?

2. What is an excise duty? Why were excise duties introduced?

3. What rights do local bodies of authority have regarding taxes?

4. How can tax assessment be done?

5. What do you think about tax collection in Russia: is it poor or not?

6. What measures, in your opinion, can improve tax collection in Russia?

UNIT 11. ACCOUNTING

Assignment 1. Remember the meaning of the following words and word-combinations:

accounting phase capture processing communication recording book-keeping record at a profit meet one’s commitments fall due accounting equation assets equal liabilities owner’s equity financial statements balance sheet income statement profit and loss account double-entry bookkeeping entry account cash basis accrual basis debit debit side credit credit side

бухгалтерский учет стадия, этап, фаза получение (информации) обработка (информации) передача (информации) запись (информации) счетоводство, бухгалтерия n, запись; v, записывать, отражать в отчетности с прибылью выполнить обязательства наступать (об обязательствах), подлежать оплате, подлежать выполнению бухгалтерское равенство активы равняться , быть равным пассивы, обязательства собственный (акционерный) капитал компании финансовая отчетность балансовый отчет, бухгалтерский баланс отчет о прибылях и убытках счет прибылей и убытков бухгалтерский учет по методу двойной записи запись, проводка счет метод записи доходов и издержек на счетах только при их поступлении и выплате; кассовая база метод начислений при учете доходов и издержек на счетах; запись доходов и издержек в момент завершения операции дебет левая сторона баланса, дебет счета кредит правая сторона баланса, кредит счета

Assignment 2. Practice the pronunciation of the following words:

accounting; significant; theoretical concept; financial results; economic entity; capturing financial information; processing; beyond; analysis; record (n); record (v); assets and liabilities; owner’s equity; double–entry bookkeeping; disseminate; two separate entries; accounting equation; quarterly; half-yearly; annually; cash basis; accrual basis; separate page; two halves; income statement.

Assignment 3. Read and translate the text using a dictionary.

ACCOUNTING PRINCIPLES AND CONCEPTS

The accounting system in any given country is one of the key elements of the economic system. It is determined to a significant extent by the level and direction of the economic system's development.

The most important theoretical concept of the Anglo-American accounting may be summed up as follows: the subject of accounting is the calculation of the financial results of an economic entity's business activity.

Accounting is used to describe the transactions entered into by all kinds of organizations.

Accounting can be divided into three phases: capture, processing and communication of financial information.

The first phase, the process of capturing financial information and recording it, is called book-keeping. Accounting, in the true sense of the word, extends far beyond the actual making of records. It includes their analysis and interpretation, it shows the relationship between the financial results and events which have created them.

Accounting can show the managers or owners of a business whether or not the business is operating at a profit, whether or not the business will be able to meet its commitments as they fall due.

Accounting is based on the accounting equation, which states that a firm's assets must equal its liabilities plus its owners' equity.

Assets and liabilities, profits or losses are listed in financial statements. The two main types of financial statements are the balance sheet and the income statement (profit and loss account).

The balance sheet lists a firm's assets, liabilities and owner's equity at a point of time.

Changes in the balance sheet are made according to the principle of double-entry bookkeeping. This principle made its appearance in the 13th century in Northern Italy. It was improved and disseminated at the end of the 14th century by the work of Luca Pacioli, a monk and a university teacher. This principle states that each transaction must be recorded on the balance sheet as two separate entries so that the accounting equation will hold at all times, the totals of each side will always equal one another, and that this will always be true no matter how many transactions are entered into.

Balance sheets are drawn up periodically: monthly, quarterly, half­-yearly, annually.

There is an account for every asset, every liability and capital. Accounts can be prepared either on a cash or accrual basis. Each account should be shown on a separate page.

The double entry system divides each page into two halves. The left-hand side is called the debit side, while the right-hand side is called the credit side.

The balance sheet shows a lot of useful financial information, but it does not show everything. A firm's sales, costs, and profits for a given period are shown in an income statement.

Assignment 4. Find English equivalents to the following phrases in the text:

в значительной степени; можно суммировать (сформулировать) следующим образом; сделки, в которые вступают; в истинном смысле слова; выходит далеко за рамки; работает ли предприятие с прибылью или нет; когда наступит срок; в определенный период времени; он был усовершенствован и распространен; остается всегда справедливым; независимо от того, сколько сделок учитывается (записывается); отражаются в отчете о прибылях и убытках.

Assignment 5. Match the verbs from A with the nouns from B and use them in sentences of your own:

A 1) to calculate 2) to describe 3) to capture 4) to analyze and interpret 5) to operate 6) to list 7) to improve and disseminate 8) to draw up 9) to prepare 10) to meet

B a) records b) the commitments c) balance sheets d) accounts e) the transactions f) the financial results g) at a profit h) financial information i) profits and losses j) the principle

Assignment 6. Answer the questions on the text:

1) What is the accounting system of any country determined by?

2) What is the subject of accounting?

3) Name three phases of accounting. How can the first phase be called?

4) Why is it necessary to analyze and interpret the records?

5) What does the accounting equation state?

6) What are the two main types of financial statements?

7) What does the balance sheet list?

8) Who improved and disseminated the principle of double-entry bookkeeping ?

9) What is main idea of the double-entry system?

10) How often are balance sheets drawn up?

11) What kind of information does an income statement show?

Assignment 7. a) Fill each gap with a suitable preposition.

b) Write down 3-5 questions on the text.

c) Sum up the text in 5-7 sentences and present your summary