VAT avoids the cascading effect of VAT by taxing only the value added at each stage of production. For this reason, VAT has gained popularity around the world compared to traditional sales taxes. In principle, VAT applies to all supplies of goods and services. VAT is levied on the value of the goods or services supplied in each transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government. However, if the buyers are not the final consumers, but the goods or services purchased are costs to their business, the tax they paid on those purchases may be deducted from the tax they charge their customers. The government only receives the difference; In other words, taxes are paid by each participant in the sales chain on the gross margin of each transaction.  A Georgian title and license plate will not be issued until the Due Georgian sales tax has been paid. The amount of VAT due depends on the purchase price of the vehicle or the fair value of the vehicle if no sales invoice is presented. Look at the VAT rate in your country.
Published sales tax rates for counties include the Georgia state sales tax rate. PRINCIPLE OF NATIONALITY – A taxpayer`s nationality may affect how it is taxed and the nature of its tax burden, but comprehensive income tax treaties generally provide that foreign taxpayers should not be subject to discriminatory taxation on the basis of their nationality. NEGATIVE INCOME TAX — A proposed system to provide financial assistance to individuals and families living in poverty, taking advantage of existing income tax collection mechanisms. A low-income individual or family would receive a direct subsidy called a negative income tax. NEGLIGENCE – A lack of care or failure to do what a reasonable and normally prudent person would do in the circumstances. Net income — Net income is gross income minus deductible expenses related to income. Many countries levy income tax on this basis. NET OPERATING LOSS — Amounts by which business expenses exceed income for a tax year. An entrepreneur`s operating losses are, on the whole, the excess of his operating expenses over the income from his business activities. NET INCOME — The difference between operating income and deductible business expenses, subject to any adjustment for tax purposes. NET PROFIT MARGIN — Ratio of operating income to gross income (or sales) NET WEALTH TAX — See: Wealth tax NET WORKING CAPITAL — Current assets minus current liabilities.
WEALTH TAX — Many European countries levy wealth tax as part of the wealth tax. The tax base for resident taxpayers is generally the taxpayer`s global net worth, i.e. total assets minus liabilities and deductions and exemptions that are particularly permitted by tax laws. NEXUS link. – Often a requirement in tax law to determine 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 in the state. NOMINAL CAPITAL — The amount of capital defined as such in the articles of association. Typically, a certain minimum amount of nominal capital is required to form a legal entity. NOMINAL VALUE — See: Nominal value REGISTERED SECURITIES — See: REGISTERED NON-DISCRIMINATION SECURITIES — Tax treaties often contain a «non-discrimination article» which states that citizens or nationals of one country residing in the other country may not be subject to local taxation different from the tax payable to citizens and nationals of the host country in the same circumstances (including residence), or is more onerous than the tax to which citizens and nationals of the host country are subject in the same circumstances (including residence).
UNQUALIFIED 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. DEBT WITHOUT RECOURSE – A debt for which a person has no personal responsibility. For example, a lender may take the pledged asset as collateral to repay a debt, but has no recourse to the borrower`s other assets. NON-RESIDENT – Overall, 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 taxable territory, while residents can be taxed on global income. NON-RESIDENT ALIEN – A non-resident person who is not a citizen or national of the tax jurisdiction. NOTICE — The written decision of the tax authorities after reviewing a taxpayer`s tax return, determining the amount of taxable income and calculating the amount of tax due. NOTICE OF DEFECTS — See: Insufficiency OF FIXED ASSETS — All property held for investment by a taxpayer. CALL OPTION – A contract in which the option holder has the right, but not the obligation, to purchase securities or commodities no later than a certain date at a specific strike price. CAPITAL EXPENDITURE — Expenditure on improvement rather than repair.
If expenses are more closely related to the structure of firms` revenues than to their profitability, these are capital expenditures. CAPITAL GAIN — Gain from the sale of capital assets. CAPITAL TAX — A tax based on equity participations, as opposed to a capital gains tax. CAPITALIZE – Record capital expenditures as additions to asset accounts rather than as expenses. CAPITAL LOSS — A loss resulting from the sale of a capital asset. CAPTIVE BANK – A wholly-owned subsidiary of a multinational group of companies whose purpose is to provide banking services to the group and those with whom the group cooperates. A company-owned bank is usually in a tax haven to take advantage of low capital requirements and the absence of exchange controls. CAPTIVE INSURANCE COMPANY — A wholly-owned subsidiary of a multinational group of companies that exclusively insures or reinsures the risks of the companies belonging to the group. A company-owned insurance company is usually established in a low-tax country.
Whether premiums paid to company-owned insurance companies are recognised as business expenses depends on the country. DEFERRAL — See: CARRY FORWARD — See: CARRY FORWARD — The process in which deductions or credits from a taxation year that cannot be used to reduce the tax payable in that year are applied to a tax liability in subsequent years (carry-forward) or in previous years (deferral). CASH BASIS — The accounting method that recognizes income and deductions when money is received or paid. CSF — See: Cost-Sharing Schemes CENTRAL ADMINISTRATION AND CONTROL — The location of central management and control is a test for determining the place of residence of an enterprise. Overall, this is the highest level of control over a company`s activities. VITAL INTEREST — This is one of the criteria used to solve the problem of dual residence of individuals. It refers to where the taxpayer`s personal and economic relationships are closer. CFC — See Foreign Controlled Company CHERRY PICKING — A term used in the United States in R&D agreements to prevent a party from selecting or financing only successfully developed technologies, i.e., cherry picking. In the transfer pricing context, it often describes a situation in which a tax administration attempts to impose a TP adjustment on a taxpayer based on a few «cherry breeders» transactions with related parties and persons from other comparable companies in order to maximize the adjustment. CIF VALUE – The value of imported goods, which includes costs, insurance and freight. CIVIL LAW — Legal systems based primarily on laws or codes and not on judicial decisions. The French and German systems are examples of this.
CLOSE HOLDING — A company owned or controlled by a single shareholder or a closely related group of shareholders. ACCORDING TO THE INCOME STANDARD — See: Supply of COMMERCIALLY INTANGIBLE Super Royalties – An intangible asset used in commercial activities such as the manufacture of a good or the provision of a service, as well as an intangible right that is itself a business asset transferred to customers or used in commercial transactions. COMMODITY FUTURES – Contracts traded on recognized futures markets in which sellers promise to deliver a specific commodity on a certain date at a predetermined price. GOODS TAX — A tax based on a selective number of goods. COMMON LAW — The law developed by the judiciary in systems, based on English law and followed by the doctrine of precedent, that is, previous judicial decisions in similar cases. Much of that is now enshrined in law. Again, this term is used to describe a system that is ultimately based on English legal systems, as opposed to civil law systems. COMMON SHARES – The common shares of a company. A capital or participation in a company.
The holder of common shares usually has one vote to decide corporate matters. Common shares usually have the last priority when profits or assets are distributed. BUSINESS – Often used to refer to a separate legal entity (a corporation) organized to carry on an activity, business or industrial enterprise. Sometimes it has a broader meaning to refer to individual or collective enterprises that seek profit. COMPARABILITY ANALYSIS — Comparison of controlled transaction conditions with conditions prevailing in transactions between independent companies (uncontrolled transactions). Controlled and uncontrolled transactions are comparable if none of the differences between transactions could have a significant impact on the factor examined in the methodology (e.g. B the price or margin) or whether sufficiently precise adjustments can be made to eliminate the significant effects of these differences. COMPARABLE PROFIT METHOD (MPC) — Under U.S.
regulations, CPM is a method of determining an arm`s length payment for the transfer of intangible assets. .