Photocopy of the annual income tax return (form BIR 1702) with the audited financial statements and/or the account information form for the covered fiscal year duly received by the BIR; and For the purposes of this paragraph, the term „deferred executive compensation“ means remuneration that would be the remuneration of directors for services rendered in an applicable taxation year, but for the fact that the deduction under this Chapter (without regard to this paragraph) for that remuneration is permitted in a subsequent tax year. 1997 – point a). Hrsg. 105–34, § 1204(a), inserted at the end of the final provisions „The preceding sentence does not apply to federal employees during a period during which such employees are certified by the Attorney General (or his designate) that they are traveling on behalf of the United States on temporary duty to investigate or assist in the investigation of a federal crime.“ NATIONALITY PRINCIPLE – A TAXPAYER`S NATIONALITY MAY AFFECT HOW IT IS TAXED AND THE NATURE OF ITS TAX BURDEN, BUT COMPREHENSIVE TAX TREATIES GENERALLY STIPULATE THAT FOREIGN TAXPAYERS SHOULD NOT BE TAXED IN A DISCRIMINATORY MANNER BECAUSE OF THEIR NATIONALITY. NEGATIVE INCOME TAX – A proposed system to provide financial assistance to individuals and families living in poverty, using existing income tax collection mechanisms. Low-income individuals or families would receive a direct subsidy called a negative income tax. NEGLIGENCE – Failure to do what a reasonable and usually prudent person would do in the circumstances. NET INCOME – Net income is gross income less income-related deductible expenses. Many countries levy income tax on this basis.
NET OPERATING LOSS – Amounts by which business expenses exceed income in a taxation year. The operating losses of an economic operator represent, broadly speaking, the excess of its operating expenses over the revenue of its activity. NET INCOME – The difference between transaction income and deductible operating expenses, subject to any tax adjustment. Net profit margin — Ratio of operating income to gross income (or receipts) NET WEALTH TAX — See: Wealth tax Net working capital — Current assets minus current liabilities. NET WEALTH TAX – Many European countries levy a wealth tax as part of the wealth tax. The tax base for resident taxpayers is generally the taxpayer`s worldwide net assets, i.e. the balance sheet total minus liabilities, deductions and exemptions that are specifically permitted by tax legislation. NEXUS link. — Often a requirement in tax law to determine tax liability or deductibility.
For example, expenses are deductible if they are „related“ to gross income. In the United States, the taxable income of a multi-state corporation can only be attributed to a particular state if the corporation has a sufficient connection to the state. NOMINAL CAPITAL – amount of capital defined as such in the articles of association. Typically, a certain minimum amount of share capital is required to create a legal entity. NOMINAL VALUE — See: Nominal value REGISTERED SECURITIES — See: Registered securities NON-DISCRIMINATION — Tax treaties often contain a „non-discrimination article“ which stipulates that citizens or nationals of one country who reside in the other country may not be subject to local taxation different from that imposed on citizens and nationals of the host country in the same circumstances. (including residence). NON-QUALIFYING STOCK OPTION – A STOCK OPTION THAT DOES NOT MEET THE INCENTIVE STOCK OPTION REQUIREMENT UNDER U.S. TAX LAW.
The gap is taxed as ordinary income. NON-RECOURSE DEBT – A debt for which a person has no personal responsibility. For example, a lender may take the assets given as collateral to repay a debt, but has no recourse to other assets of the borrower. NON-RESIDENT – Basically, a person who spends most of the calendar year outside their country of residence. Non-residents are generally taxed on income from sources located in the tax jurisdiction, while residents may be taxed on worldwide income. NON-RESIDENT ALIEN – A non-resident person who is not a citizen or national of the tax jurisdiction. TAX ASSESSMENT – A written decision of the tax authorities after reviewing a taxpayer`s tax return, which determines the amount of taxable income and calculates the amount of tax owing. NOTICE OF IRREGULARITY — See: Default OECD MODEL TAX CONVENTION — See: Model tax agreement OFFENCE, TAX — Tax offences may be set out in tax laws covering issues such as late filing, late payment, failure to report taxable income or transactions, and negligent or fraudulent misrepresentation in tax returns.
OFFICE – For the purposes of applying a tax treaty, the office of a corporation is normally a permanent establishment if the business of that company is carried on in whole or in part through that office. OFFICE AUDIT – An audit in the office of a tax authority, usually a simple tax matter. OFFSHORE BANKING — Offshore banking essentially consists of borrowing in foreign currency for non-resident depositors outside the country and relending foreign currency to other non-residents. A number of countries have a special regime for taxing offshore banks. OFFSHORE COMPANY – A term generally applied to a company registered in a country (often a tax haven) other than the country or countries in which it operates. An offshore company (or non-resident company) is often used for business insurance, overseas marketing, international shipping, and tax haven programs. OID — See: Discount on Original Program OMBUDSMAN — A member of the IRS U.S. Commissioner`s immediate staff who leads the IRS „on call“ problem-solving program – services provided by a parent company or group service center that are readily available to members of a multinational group of companies. ONE HUNDRED AND EIGHTY-THREE (183) DAY RULE – Being present in a country for 183 days or more in a 12-month period can have tax consequences, particularly with respect to a person`s tax residency or taxation of earned income (although other criteria must also be met). ONSHORE COMPANY – A term sometimes used to refer to the opposite of offshore companies. BURDEN OF PROOF – The burden and responsibility of proving a claim.
This principle is widespread in tax law, for example, when the taxpayer has the fundamental responsibility to report his taxable income or transactions. OPERATING LEASE – A LEASE IN WHICH THE LESSOR IS CONSIDERED TO BE THE OWNER OF THE LEASED PROPERTY FOR TAX PURPOSES. Cf. Leasing OPTION — Derivatives A financial instrument consisting of a binding agreement that gives a party the right, but not the obligation, to buy or sell commodities, securities or currencies at a specified future date at a specified price. TAXATION OPTION – In the context of VAT, a VAT-exempt trader can sometimes claim to be subject to VAT, with the advantage of being entitled to input VAT on its output tax. COMMON SHARES – Common shares (also known as common shares) are generally shares of equal par value and have the same rights and obligations, such as the right to participate in the management of the Company by voting at the general meeting and the right to receive dividends. The rights of common shareholders to dividends are generally subordinated to the rights of bondholders and preferred shareholders. INITIAL ISSUE DISCOUNT (OID) – A discount to the par value at the time of issuance of a bond. The most extreme version of an OID is a zero-coupon bond, which originally sells well below par and pays no interest until maturity. PRINCIPLE OF ORIGIN – principle in a VAT system where goods are taxed in the country where they are produced, i.e. they are taxed on the basis of their place of production or origin.
OTHER INCOME – Income not mentioned elsewhere in a tax treaty is often the subject of a separate section entitled „Other Income“. OUTGOING TRANSACTION – a term that refers to the tax treatment of residents (and possibly citizens) of a country who do business and invest abroad. OUTPUT-TAX – A term used in the context of VAT to refer to the tax due on the sale of goods or services by taxable persons for tax purposes and, as opposed to input tax, for which a credit note is available. Overhead – The general cost of a business as opposed to the direct cost of producing a good or service. „Overhead“ is a term that can also be used in tax matters for costs incurred by a company`s head office for the benefit of branches or subsidiaries. OVERSEAS — In the United Kingdom, the term „overseas“ is generally used instead of „alien“ because „alien“ cannot be applied to Commonwealth countries or territories that are British possessions, such as the British Virgin Islands, the Isle of Man, and the Channel Islands.