Варламова А.И., Дигтяр О.Ю, М.В. Мельничук, В.М. Осипова

РОССИЙСКОЙ ФЕДЕРАЦИИ»

 

Департамент языковой подготовки

 

Варламова А.И., Дигтяр О.Ю, М.В. Мельничук, В.М. Осипова

 

TAXES AND TAXATION

Учебник по английскому языку для студентов 3 курса

Москва 2018

Рецензенты:

доцент, кандидат филологических наук Н. В. Банина

(финансовый университет)

доцент, кандидат экономических наук Д. Ю. Шакирова

(финансовый университет)

 

Варламова А.И., Дигтяр О.Ю, М.В. Мельничук, В.М. Осипова

Учебник по английскому языку для студентов 3 курса

 

Contents

UNIT 1. 5

PART 1. 5

TOPIC FOCUS: The history of taxation in the world. 5

PART 2. 15

TOPIC FOCUS: Tax planning. 15

PART 3. 24

TOPIC FOCUS: 5 Year-End Tax Strategies You Don’t Want to Miss. 24

Taxes throughout Russian history. 26

Taxes in Kievan Rus’: Poliudie andPovoz. 26

UNIT 2. 28

PART 1. 28

TOPIC FOCUS: The Russian tax system.. 28

PART 2. 39

TOPIC FOCUS: Roles of Tax Consultants. 39

Taxes throughout Russian history. 50

Poliudie. 50

UNIT 3. 53

PART 1. 53

TOPIC FOCUS: Special tax treatments. 53

PART 2. 63

TOPIC FOCUS: Tax Accounting Careers. 63

PART 3. 72

TOPIC FOCUS: 5 Ways to Short Bitcoin. 72

CASE STUDY.. 74

Taxes throughout Russian history. 75

"Any owner has to part with what has fallen from the cart”. 75

Russian road duty “Myto”. 77

UNIT 4. 79

PART 1. 79

TOPIC FOCUS: Functions of Taxation. 79

PART 2. 89

TOPIC FOCUS: Key Taxation Vocabulary. 89

PART 3. 98

TOPIC FOCUS: How the GOP* Tax Bill Affects You. 98

Taxes throughout Russian history. 99

Tribute to the Golden Horde. 100

UNIT 5. 103

PART 1. 103

TOPIC FOCUS: Classes of taxes. 103

PART 2. 113

TOPIC FOCUS: Direct and Indirect Taxes. 114

PART 3. 121

TOPIC FOCUS: How Will Your Tax Bracket Change?. 121

Taxes throughout Russian history. 124

The tamga tax. 124

UNIT 6. 126

PART 1. 126

TOPIC FOCUS: Corporate profit tax. 126

PART 2. 136

TOPIC FOCUS: Corporate Income Tax. 136

PART 3. 144

TOPIC FOCUS: What Is An ICO?. 144

CASE STUDY.. 146

One of the Three Certain Things in Life: Taxes, Taxes, and More Taxes. 146

Taxes throughout Russian history. 147

The salt tax. 147

UNIT 7. 150

PART 1. 150

TOPIC FOCUS: VAT. 150

PART 2. 158

TOPIC FOCUS: How VAT works. 158

PART 3. 168

TOPIC FOCUS: I want to start my own ICO. How do I do that?. 168

UNIT 8. 175

PART 1. 175

TOPIC FOCUS: The Mechanism of VAT collection. 175

PART 2. 184

TOPIC FOCUS: Capital Gains Tax. 184

PART 3. 195

TOPIC FOCUS: How Interest Rates Affect Property Values. 195

Taxes throughout Russian history. 197

The beard tax. 197

UNIT 9. 200

PART 1. 200

TOPIC FOCUS: An Excise. 200

PART 2. 207

TOPIC FOCUS: Roles of Tax Authorities. 207

CASE STUDY.. 219

One of the Three Certain Things in Life: Taxes, Taxes, and More Taxes. 219

KEYS. Ошибка! Закладка не определена.

Для заметок. Ошибка! Закладка не определена.

References………………………………………………………………………………………239

 

UNIT 1

PART 1                  

TOPIC FOCUS: The history of taxation in the world

Discuss these questions with a partner.

1. What do you know about the history of taxation?

2. What countries have the lowest and the highest taxes?

3. Can taxes be negative or positive?

4. Is it possible to have “rational” tax system?

Exercise 1.

Practice reading the following words and collocations.

a) approximately; bureaucracies; diverse; eventual; failure; fifth; foreigner; grievance; headgear; issue; jurisdiction; militiamen; partially; significantly; stationary; surplus; throughout;thus;turmoil; wearisome; welfare; weird;

b) ancient civilizations; centralized governments; Chinese societies; effort; European and Mediterranean civilizations; Egyptian Pharaohs; excessive tax burden; Greeks, Egyptians and Romans; functional equivalent;hefty duties; Jews and Christians; medieval period; mercenary force; monarch; Muslim conquerors; previously purchased; tax legislation; tax records;

c) accumulate;be dedicated to smth.; be obligated to do smth.; be subject to smth.; enforce tax policies; ensure; weigh heavily on smth.

The history of taxation

The basic principles of taxation are nearly as old as human society—the history of taxes stretches thousands of years into the past. Several ancient civilizations, including the Greeks and Romans, levied taxes on their citizens to pay for military expenses and other public services. Taxation evolved significantly as empires expanded and civilizations became more structured.

The earliest known tax records, dating from approximately six thousand years B.C., are in the form of clay tablets found in the ancient city-state of Lagash in modern day Iraq. This early form of         taxation was kept to a minimum, except during periods of conflict or hardship.

The Greeks, Egyptians and Romans also enforced tax policies that they used to fund centralized governments. The Greeks levied several types of taxes that are still enforced in many developed countries, including taxes on property and goods. Unlike early Greek taxation, the Roman policies began to weigh heavily on the citizens as the power and corruption of the empire’s central government grew. The excessive tax burden on productive Roman citizens during the 4^th and 5^th centuries was a leading cause of the nation’s eventual economic collapse.

Early taxation was not limited to European and Mediterranean civilizations, ancient Chinese societies also levied taxes on their citizens. The Chinese instituted a form of property tax around 600 B.C. that required 10 percent of cultivated land to be dedicated to the central government. All produce generated from the dedicated portion of land was taken as a tax.

Fair taxation was a key issue for many English citizens during the medieval period. Most citizens were subject to a poll tax, which was a flat tax on every adult in a jurisdiction, as well as property and church taxes. Even peasants that did not own land had to pay property taxes on land that they rented. They were also obligated to donate 10 percent of their labor or produce to the church.

In 1215, a large portion of the English nobility revolted against their monarch, King John, who had implemented new taxes and increased existing ones to finance his military ambitions in continental Europe. The king levied more taxes to help pay for a large-scale conflict, including hiring a large mercenary force, and to make up for the loss of taxable territories in France during the war. Many land-owning nobles did not trust King John’s leadership and did not feel responsible for supporting the war effort.

While turmoil and provincial strife dominated European politics, a unified and expansive empire emerged in the Middle East. Muslim conquerors took over a large portion of northern Africa and the Mediterranean region during the 14^th and 15^th centuries. They ruled over a diverse collection of populations, including nomads, Jews and Christians, who were subject to special forms of taxation that did not apply to Muslim citizens. Stationary societies that did not convert to the beliefs and traditions of Islam had to pay a special tax.

Taxation policies developed quickly during the colonial period as wealth began to flow into Europe from colonies in Africa, Asia and the Americas. Great Britain enforced the first general income tax in 1799 to help finance their war against Napoleonic France. This tax was also scaled according to income, much like the income taxes levied in most modern systems.

The dispute between the American colonists and the English crown that eventually led to the American Revolution is partially attributed to disputes concerning fair taxation. The colonist’s main grievance with the tax policy was distilled into a simple phrase, “No taxation without representation.” While the colonists were forced to pay taxes to England, including hefty duties on staples like tea and stamps, they did not receive any direct representation in Parliament or in the monarch’s court.

When the United States was founded, the federal government levied relatively few taxes. The country did not maintain a significant military force during times of peace. Instead, it relied on local militiamen for protection from marauders and local rebellions. The central government was also much smaller than it is now, and required much less money to maintain. As the new country developed, it encountered several crises and conflicts that prompted changes to the tax code.

The first federal income tax in the United States was created shortly after the Civil War to pay for the debts accrued during the costly internal conflict. The tax was not universal; it was only applied to citizens above a certain income level. This federal income tax was repealed in the 1870s, but a later administration created new federal tax legislation in 1894.

Many European nations also adopted income taxes during the 19^th century. The unifying Prussian influence over many of the independent German states helped entrench the principles of income tax in continental Europe.

 

Exercise 2.

Exercise 6.

Exercise 7. Word formation.

Exercise 8.

Match the left parts (1-3) with the right ones (A-D).

1 tax rates                A allow you to set different tax rates for items such as

                                          Shipping, Gift Wrapping and custom product

classes.

                                     

2 tax zones               B  are the percentages at which products or services

                                          are taxed.

 

 

3 tax classes                      C  are the geographical areas which tax rates are

                                          applied to. They can be defined by country,

state/province or zip/postal codes.

UNIT EXTENTION

PART 2

TOPIC FOCUS: Tax planning

Tax Planning

Every financial or investment decision a company or individual makes has its tax implications. Failing to recognize the tax impact of these decisions can produce serious consequences, which may undermine a company’s financial objectives. In order to prevent such situations from occurring, companies design and implement various strategies intended to reconcile financial goals with their tax implications and minimize the amount of taxes paid.

    This approach to tax preparation is known as tax planning. Tax planning is an analysis of a financial situation from a tax perspective, which involves exploring tax-saving opportunities and anticipating tax implications of investment and financial decisions. Effective tax planning aims at both minimizing tax liability and accomplishing tax compliance. For that reason, tax planning is largely considered a critical component of tax compliant behaviour. Tax planning strategies may include the following:

Fringe Benefit Planning

    Obtaining allowable tax deductions can be achieved through fringe benefit planning. That means offering salary packaging in form of non-cash benefits that are frequently not subject to income tax.

Splitting income

    Reducing taxable income can be achieved by distributing or splitting income among legal entities or, in other words, moving income away from an entity paying a high rate of tax to an entity paying a lower rate of tax.

Deferring tax liabilities

    Deferring tax liabilities means postponing tax liabilities until such time when income is available or to take advantage of lower tax rates.

Investment Tax Planning

    Investment tax planning reducing the amount of taxable gains from an investment sold at a profit and delaying realization of capital gains. A proper timing of a capital gains tax event is an important aspect of investment tax planning.

Negative Gearing

    Negative gearing, as a tax planning strategy, refers to a situation when the amount of income received from an investment is less than the interest expense. The difference between the two can be used to claim tax deductions.

 

Exercise 1.

Exercise 5.

Tax Harmonisation

Creating conditions for free movement of goods, labour and services requires a tax system that is based on a common set of rules. The process of convergence of tax system, or ________________ (1), is of particular importance for the European Union. This is because proper functioning of a single market necessitates elimination of _______________ (2), such as customs duties and trade barriers.

    Tax harmonization can take different forms and may involve harmonization of either tax bases or tax rates, or both of them (full harmonization). However, there are many obstacles to achieving that goal. These obstacles are primarily the result of unwillingness of member states to surrender their tax and _____________(3) to the EU on account of various economic, political and social reasons.

    In consequence, the creation of a _________________(4) is no longer the primary objective within the EU. Instead, it strives towards approximation of national tax system and harmonization of ___________ (5), VAT in particular.

VAT Harmonisation

    Although VAT is relatively easy to administer within a single country, it becomes more complex when businesses operate across borders, and more than one country imposes their VAT regulations. In order to prevent ___________(6), most EU countries have adopted the destination-based principle of taxation, under which VAT is levied in the country where the taxed product is being sold. An alternative to destination principle is the __________(7) principle, which requires that VAT is collected in the country where production takes place.

Direct Tax Harmonisation

    Harmonization of direct taxes proved a difficult task due to numerous discrepancies between member countries. Those discrepancies arise from different mechanisms for calculation of tax base, different levels of tax rates, different tax-free ____________(8) and different forms of taxation in general.

Double Taxation Agreements

    Since many businesses or individuals, residents in one country, earn taxable gains abroad, they may be subject to taxation in both countries. In order to prevent this from happening, many countries have signed _________(9) double taxation agreements. Under the provisions of these agreements, taxpayers are usually required to pay a tax in the country of residence and are exempt from payment in the country in which the gain was earned.

 

SPEAKING FOCUS

1. What tax planning strategies do you find most effective and why?

2. What tax planning strategies do companies in your country employ to reduce the amount of taxable income?

3. You are a tax adviser engaged by your partner’s company to improve their tax position. Suggest several tax planning strategies and explain how they might help.

4. Describe the impact that tax harmonization produces on your country.

 

 

VOCABULARY FOCUS

accrue (v)                                              накапливать

Americas                                              Северная и Южная Америка

appealing                                              привлекательный

approximation                                     приблизительное соответствие

attribute (v)                                          приписывать

be subject to smth.                               подлежать; подпадать под действие;

                                                             подвергаться

Book of Genesis                                   Книга Бытия

 bounty                                                 нажива, награда

carve (v)                                               вырезать

clay tablet                                             глиняная дощечка

compliance                                           соблюдение законодательных требований

compliant behaviour                            уступчивость

conceal (v)                                            скрывать, утаивать

convergence                                          сближение; взаимодействие

dedicate (v)                                           предназначать

defer (v)                                                откладывать; переносить срок

depreciation allowance                         налоговая скидка на износ основных средств

derive from (v)                                     происходить от; выводиться из

double taxation                                    двойное налогообложение

donate (v)                                             жертвовать; дарить

encounter (v)                                        столкнуться

enforce (v)                                            вводить в действие; воплощать

                                                                      в жизнь соблюдение законов и

                                                                      правил

entrench (v)                                          укреплять; укоренять

excessive                                              чрезмерный; повышенный;

                                                             непомерный

fiscal sovereignty                                  налогово-бюджетный суверенитет

flat tax                                                  фиксированный подоходный налог

fringe benefits                                       льготы и привилегии

grievance                                              недовольство

hefty                                                     внушительный; значительный

headgear                                               головной убор

institute (v)                                           учреждать; устанавливать

Jew                                                       иудей

large-scale                                             широкомасштабный; большой

levy (v)                                                 собирать; облагать (налогом)

make up for (v)                                    возмещать, компенсировать что-то

medieval                                               средневековый

mercenary                                             военный наемник

militiamen                                            полиция

negative gearing                                    отрицательный механизм

“No taxation without representation”  не может быть налогов, если пла-

                                                             тельщики не имеют представителей

                                                             в налогооблагающем органе

nobility                                                 аристократия; дворяне

nomad                                                  кочевник

poll tax                                                 подушный налог

produce                                                продукция; сельскохозяйственная продукция

property tax                                         налог на собственность

reconcile (v)                                          улаживать; совмещать

repeal (v)                                              аннулировать (закон); признать

                                                             утратившим действие

rule over (v)                                          править; управлять

salary packaging                                  система заработной платы

scaled                                                   вычисленный; со шкалой

shift (v)                                                 перемещать, передвигать; перекладывать

single market                                        единый рынок

split (v)                                                 отделять; разделять на части

staples                                                  основные предметы торговли

strife                                                     вражда; противостояние

take over (v)                                         поглощать; забирать

tax burden                                            налоговая нагрузка

tax code                                                налоговый кодекс

tax harmonization                                унификация налогового законодательства; согласование налоговых режимов

tax implication                                     воздействие налогообложения

tax planning                                         оптимизация налогообложения; налоговое планирование

timing                                                   определение сроков; время осуществления

tribute                                                   дань, подношение

turmoil                                                 беспорядки, массовые волнения

undermine (v)                                       разрушать; подтачивать; негативно влиять

uniform tax system                              единая налоговая система

wearisome                                            утомительный, изнурительный

weigh (v)                                              довлеть, тяготеть

weird                                                    необычный, причудливый

wig                                                       парик

 

PART 3

READING COMPREHENSION

Make up the summary of the text using the questions to organize your answer:

1. What is the tribute? Which forms of tribute do you know? When did it appear in the Ancient Russia?

2. Was there any division between Grand Prince income and proceeds for public needs?

3. What did the tribute consist of?

4. Which main ways of gathering the tribute in Kievan Rus’ do you know?

5. Which was one of the main tasks of the prince?

 

Vocabulary notes

tribute                      дань

tax in kind                налог в натуральной форме

written records         летопись

proceeds                   доходы, выручка

public needs                      государственные нужды

revenues                   поступления

service fees               плата за услуги

 

 

UNIT 2

PART 1                  

TOPIC FOCUS: The Russian tax system

 

Exercise 1.

Exercise 2.

Tax policy

(1) __________________________

The Russian tax system includes federal, regional and local taxes. While federal taxes are payable in all Russian regions, regional and local taxes are applicable to companies registered or doing business in the relevant region and municipality.

 

(2) __________________________

The Russian tax system has undergone significant revision since 1999 when the Tax Code Part I was enacted. This law combines provisions relating to general tax principles, rights and obligations of taxpayers, tax authorities, and tax administration.

 

(3) __________________________

 Later, since after 2001, the regulations on all taxes were revised and incorporated in the Tax Code Part II. Through this reform the tax administration became more transparent and predictable, and the number of taxes and the overall tax burden were reduced significantly.

 

(4)  __________________________

The current income tax rates are particularly low, even in the international context, being 20 percent for companies and 13 percent for Russian tax resident individuals. Still, many aspects of the Russian tax system are subject to significant uncertainty. Further, the substantive provisions of Russian tax law and the interpretation and application of those provisions by the Russian tax authorities may be subject to more rapid and unpredictable change (possibly with retroactive effect) and inconsistency than in jurisdictions with more developed tax systems.

 

(5) __________________________

    Over the past few years, the Tax Code was adopted to streamline tax administration and reduce tax burdens. Important revisions to corporate income tax (in Russian terminology “profit tax”) include reduction of the tax rate from 24 percent to 20 percent, introduction of thin capitalization rules and participation exemption rules for dividends, softening of depreciation rules, and extending deductions (including for interest expense) to make them adequate in the current financial crisis. In the area of VAT, positive changes include exemption for transactions with IP rights (except for trademarks) and certain types of R&D, extension of the tax period from a month to a quarter and the permission of offset for input VAT included in advance payments. Russian tax practice has been known for, in some cases, a contradictory and inadequately aggressive approach by tax authorities and inconsistent application of good-faith taxpayer criteria. The tax environment has improved remarkably since the Supreme Commercial Court confirmed taxpayers’ rights to optimize their tax burden and suggested the concept of a “justified tax benefit”.

b) Match these headlines (A-E) with the gaps in the article (1-5).

A Recent developments

B Great changes

C The problems of the tax law development

D New changes in the Tax Code

E Various types of taxes

 

Exercise 6.

Exercise 7. Word formation.

Match the words (1-4) with their definitions (A-D).

1. tax evasion           A goods to be bought and sold

2. value-added tax   B  the total value of goods and services produced

                                          within a country in a year

3. tax burden           C  reduction or minimization of tax liability by illegal

                                         methods;

4. GDP                    D a tax on the amount by which the value of an article

                                         has been increased at each stage of its production

                                         or distribution;

5. merchandise        E  the amount of tax suffered by an individual or

                                         organization;

 

UNIT EXTENSION

PART 2                  

Exercise 1.

Exercise 4.

Future Forms

Student A

You are a head of the accounting department, gone away on a two-day business trip. You have your work schedule with you, but haven’t had time to allocate tasks to your staff. Phone your secretary to see what is going on.

 

    Example: Who is meeting the new client at 9 o’clock today?

TODAY