Complete these sentences using the base word given at the end of each sentence. You need to form an appropriate word. The first one (0) is given as an example.

0 In 1660, England placed a tax on fireplaces. The tax led to people covering their fireplaces with bricks to conceal them and avoid paying the tax. (PAY)

1 In the 1700’s, England placed a tax on bricks. Builders soon realized that they ________ use bigger bricks (and thus fewer bricks) to pay less tax. (CAN)

2 In 1712, England imposed a tax on printed wallpaper. Builders avoided the tax by ________ plain wallpaper and then painting patterns on the walls. (HANG)

3 England introduced a tax on hats in 1784. To avoid the tax, hat-makers stopped calling their _______ "hats", leading to a tax on any headgear by 1804. (CREATE)

4 In 1789, England ________ a tax on candles. People were forbidden from making their own candles unless they obtained a license and then paid taxes on the candles they produced. (INTRODUCTION)

5 In 1795, England put a tax on the aromatic powders that men and women put on their wigs. This led to a dramatic decline in the _______ of wigs. (POPULAR)

6 In 1885, Canada created the Chinese Head Tax, which taxed the entry of _______ immigrants into Canada. (CHINA)

7 Salt was a very popular thing to tax because _______ it is necessary to humans. (CONSUME)

8 England has a tax on televisions. If you own a television in your home, you must pay an annual fee, _______ called a television license, for each television you own. (FORMAL)

9 Color televisions are taxed at a _____ rate than black and white televisions. (HIGH)

10 __________ enough, if a person is blind and owns a TV in his or her home, he or she still has to pay the tax, though only half of it. (INTEREST)

11 States like Iowa, Pennsylvania, and New Jersey exempt pumpkins from a sales tax but only if they are ______ and not carved. (EAT)

 

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

Exercise 9. Two-minute presentation.

Choose one of the following subjects and prepare to give a two-minute presentation to the group.

   

· The various systems of taxation in ancient time

· The various systems of taxation in medieval time

· The various systems of taxation in modern time

· The impact of taxes on the course of civilization

· The crucial role of taxes in the Roman Empire

· Strange and unusual taxes from around the world

· History of taxation in the United States

· History of taxation in Russia

· History of taxation in the United Kingdom

· A brief history of Australia’s tax system

· Successful tax reforms in the world

· A world history of tax rebellions

· Taxation: its triumph and collapse

 

 

PART 2

TOPIC FOCUS: Tax planning

Discuss these questions with a partner.

1. What is tax planning?

2. What is the purpose of tax planning?

3. What are the basic tax planning strategies?

4. What tax planning strategies does your company apply?

5. Why is tax harmonization important for the EU?

6. What forms can tax harmonization take?

7. What are the main obstacles to attaining tax harmonization within the EU?

8. What measures have been taken within the EU to prevent VAT double taxation?

 

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: