POT (1-3) Flashcards
What is the competent jurisdiction?
Country whose tax laws apply to the entity
Should a tax aim to raise as much money for the gov as possible?
No
Does setting deadlines ensure the correct amount of tax is paid?
No
What power is a tax authority least likely to be granted?
Power of arrest
What are the 4 traits of an acceptable tax according to Adam Smith?
- Certainty
- Convenience
- Efficiency
- Equity
What is Hypothecation?
Process of earmarking tax revenue for specific types of expenditure
What is the tax gap?
Difference between the amount of tax due to be paid and the amount actually collected
What are the 3 tax bases used by developed countries?
- Income
- Assets
- Consumption
From the perspective of the revenue authority, what makes a commodity suitable for an excise duty?
- Few large producers
- Inelastic demand
- No close subs
- Large sales volume
Why is accounting depreciation replaced with tax depreciation?
Ensure that all entities are allowed the same rates of depreciation for tax purposes
How is indexation calculated?
Indexation rate x cost (including extras)
Take away from proceeds
What is the nature of a group loss relief?
Members of the group may surrender losses to another member
How are trading losses handled?
Carried forward and set against next year’s profit
Then tax the figure after this
What are 2 benefits of group loss relief?
- Relief can be claimed earlier
- Tax can be saved because entity loss surrendered pays a higher rate of tax
What is the meaning of rollover relief?
Capital loss incurred on disposal carried forward
