Подборка учебного материала по английскому языку для работы в профильном экономическом классе (10-11)
методическая разработка по английскому языку (10, 11 класс) на тему

Taxation of legal entities and individuals. Tax liability.

Active Vocabulary Study the following terms and phrases commonly used in Taxation of legal entities and individuals. Tax liability.

Practice the use of the words and phrases commonly used in Taxation of legal entities and individuals. Tax liability.

Ex. 1 Match the words and word combinations in A to the definitions in B.

Ex. 2 Use the words from each box to make common word combinations. One word can be used twice. Then make 5 sentences of your own using these word combinations.

Key: capital gains ; recognition of expenses; fixed assets ; tax avoidance; deferred tax ;

Ex 3. Read the text and answer the questions.

Taxation Planning

The governments of some countries use the taxation system to promote investment. Taxation laws are enacted to encourage domestic and international corporations to either invest or raise capital, and tax breaks are given to specific industries or to certain types of expenses to attract investors and consumers. As a result of these taxation measures, there is significant scope for taxation planning in some countries would be well advised to use such opportunities to structure their business in the most tax effective manner.

For effective taxation planning, companies rely on tax specialists who must have an excellent understanding of both their clients’ business and the various taxation laws. Companies turn to their tax advisers for help on all the taxes for which they are liable, such as income tax, sales tax, property tax and payroll tax. These tax specialists are normally Chartered Accountants and CPAs who are not only involved in the preparation of the tax returns (compliance), but who also give advice on a multinational company’s domestic and foreign operations (consulting). Furthermore, they represent their clients before the tax authorities.

1. Can you think of any tax breaks which the government in your country has introduced recently?
2. Where can a potential investor go for advice?
3. What tax advice would you give to an individual who comes to live and work in your country?

Ex 4. A manager has asked his accountant to explain depreciation. Read and answer the questions:

Manager:  So, could you just go over depreciation again?

Accountant:   Sure, I’ve prepared a quick list of the different types like you asked.

Manager:  Great

Accountant: Ok, let’s see. Well, you know that normal accounting treatment means that a fixed asset has to be written off over its useful life. Basically we look at the cost of the item, and take away its estimated scrap value. Then we use a depreciation method to write it off.

Manager: yes, of course it’s five years for computers, I think.

Accountant: Right, well, as you say, there are different ways of doing this. Let’s see straight line, declining balance, sum-of-the-years’-digits, unit of production, hours of use. If you look at this list, you can see a description of each of these methods.

Manager: Oh yes, I see, that’s very useful.

1. What happens to fixed assets?
2. How do accountants do this?
3. What are the five methods of depreciation the accountant mentions?

1. S____________ l _________________
2. D ____________ b _____________
3.  S _________ -of-the-y __________ - d _________
4. U __________ of p _________
5. H _____________ of u _____________

Key: 1. They are written off. 2. They look at the cost of the item, take away its estimated scrap value. Then they use a depreciation method to write it off.

Key a. straight line b. declining balance c. sum-of-the-years’-digits d. unit of production e. hours of use

Ex.5. Now look at the accountant’s list of definitions. Can you match them to the methods of depreciation she mentioned in exercise 1.

1. __________________: The asset is depreciated by a constant amount every year. The depreciation expense for each year is calculated by subtracting the salvage value from the acquisition cost, and the dividing the difference by the useful life of the asset.
2. ________________: The depreciation expense is calculated by first subtracting the salvage value from the acquisition cost. The difference is multiplied by a fractional amount, where the denominator and numerator are based on the addition of the figures in the asset’s useful life.
3. ________________: The depreciation is ‘accelerated’ by this method, so that the expense is greater in the first years. The salvage value is ignored in the calculation, but the asset will not be depreciated below this value.
4. _______________: The expected usage of the asset is taken into account in determining the rate of the depreciation.
5. _____________: The expected output of the asset is taken into account in determining the rate of depreciation.

Key: 1a     2c    3b    4e   5d

  Ex. 6. Prepare a short presentation on depreciation methods. First read the questions below and note down your answers. Then organize your notes and make your presentation.

1. What depreciation method does your company/client use on its assets?
2. Why has your company/client chosen this method?
3. What are the alternatives in your country for depreciating assets?

Ex.7. An accountant explains the taxation expenses disclosure requirements to a CEO. Read the dialogue and answer the questions.

CEO: We’ve got a few minutes to ourselves. Could you just go over it again? How is the taxation expense calculated?

Accountant: OK. The operating profit minus our interest expenses gives us the profit before tax figure. This is the amount which theoretically is then subject to taxation. In fact, the taxation amount is just an estimate, because we won’t know until much later exactly how much tax we’ll have to pay.

CEO: What do we do with this estimate?

Accountant: In effect, we prepare an interim tax return. It won’t be filed, just kept by us to justify the taxation expense we include in the P&L.

CEO: Will this also be audited?

Accountant: Yes. And of course the profit after tax is the figure which we can distribute to shareholders.

CEO: What do we do when the taxable income differs from the profit before tax?

Accountant: We record what happens on the balance sheet. It’s either a net deferred tax asset or liability.

1. How does the accountant calculate the profit before the tax figure?
2. Why is the taxation amount only an estimate?
3. Do they file the interim tax return?

Read the dialogue again and complete the CEO’s notes.

Key: 1. Interest expenses 2. operating profit  3.prepare an interim tax return 4. The taxation expense we include in the D& L  5. Record it as a net deferred tax asset liability on the balance sheet

Ex.8. Later in the meeting the CEO asks more questions. Match them to the accountant’s answers. (a-g).

1. Will this also be checked?                        A. 600 euro per hour
2. Could you just go over it again?               B. I’m afraid that will be too late.
3. How is the profit calculated?                    C. every three months
4. How much is your fee?                             D. it’s basically income minus expenses.
5. How often do they check?             E. Yes, of course. Let me try to explain it differently this time
6. Who’ll handle the presentation?   F. it should be. I’ll ask Jurgen to make sure it’s done.
7. How about if we send it in next week?    G. Susanne.

Key: 1f   2e  3d   4a  5c   6g   7b

Ex 8. Use the words from the box to complete the following conversation.

Kathy : Hi Javier. How’s it going?

Javier: It’s not easy, all this English. We didn’t do any of this on my course.

Kathy: Can I help?

Javier: Well, maybe you could _______1. a couple of things. Let’s see. Ah , here we are. Provision for income taxes. What does that_________2?

Kathy : OK. Provision means putting money aside so that we have something to pay with later. So provision for income taxes is talking about the current year’s tax expense which will have to be paid in the future.

Javier: Like provisional?

Kathy :Not _______ 3. Provisional just means temporary, you know, not final. Like a provisional budget. It’s not the final version.

Javier: I see. And what about deferred income tax balances. What does deferred mean?

Kathy :_________4 put off to another day. The income has been recognized in the accounts, but the tax owing on that income will only be realized in the future.

Javier: OK. How does that affect associated companies?

Kathy :Well, it _________ 5. Associated companies and affiliates are a special case. Deferred taxes are not normally recognized on undistributed earnings, but only if the plan is to re-invest the profits.

Javier:_____________6  if we don’t invest the profits, we pay tax.

Kathy: Exactly.

Key: 1. Clarify  2. Mean  3. Exactly 4. Basically  5. Depends  6. So

Ex. 9. Explain in your own words what provision for income tax and deferred income tax balances mean?

Ex. 10. Now work with a partner to practice explaining and clarifying information. Each of you should explain a standard procedure from your workplace, and the other asks questions about it. Then swap partners and explain the procedure you have just heard to another person.

In my office the procedure for claiming travel expenses is……………………………..

The way private people pay income tax in my country is normally to……………………

Ex.11. Use the words from the box to fill in the gaps.

1. The government needs more money, so it is planning to ___________ taxes.
2. He earns a lot of money – he must be in the highest tax ________.
3. She lives there because she has to – she’s a tax ______.
4. They are planning to ___________ the tax on large company cars, and replace it with a tax on all company cars.
5. She is a student, so she is a tax _______.
6. The government is planning to introduce new tax ________ for IT companies.
7. Don’t buy a house this year - the ________ taxes are being abolished next March.
8. A tax _________ is the same as a tax declaration – it’s a list of income and tax deductible expenditure for the tax authority.

Key: 1. Increase 2. Bracket 3. Exile 4. Abolish 5 exempt 6. Breaks  7. Properly  8. Return

Ex 12. An accountant from a Swiss parent company, Uta Meier, telephones the Internal Revenue Service ( IRS) in the U.S. to discuss the treatment of certain costs. Read the conversation. What is the result of the discussion?

Uta: These costs clearly relate to the repair and maintenance of our machines.

IRS: But in your financial statements, you argue that this expenditure was to upgrade and you have capitalized it all. At first glance, it appears clear that…

Uta: Excuse me, but you know as well as I do that the accounting and tax regulations allow for different definitions of what we can capitalize, and what we must expense.

IRS: Yes, but it’s easy to work out the type of costs you have from the descriptions in your accounts. And based on our interpretation of the laws, which you can of course depreciate.

Uta: We’re going to take this further. I’m afraid I can’t agree with your comments.

IRS: Look, I’m sorry, but this conversation is going nowhere. I suggest you make a submission and send it to our office. We can then consider your arguments in detail.

Uta: Fine. I’ll do it today. Thanks for your time.

IRS: You’re welcome. Goodbye.

Uta: Bye.

Key: They cannot agree and decide that Uta should make a submission and send it to the IRS office so that her arguments can be considered in detail.

Ex.13. Find words from the conversation which mean the following:

1. To improve a machine or equipment _______________________
2. Written suggestion ______________________________
3. An opinion of what something means ________________
4. Rules _____________________________
5. To include as an asset _____________________
6. An explanation of what something means ____________________

Key: 1. to upgrade  2. Submission   3. Interpretation  4. Regulations  5. To capitalize

6. definition

Useful Phrases

Ex 14. Use phrases of polite language from the box to “soften” the following statements.

Ex 15.Use the clues to give the definitions for the following:

1. Suggestion, often in writing

2. a plan of how much you are going to spend

3. not permanent

4. opposite of loss

5. delayed

Key:1.  Submission  2. Budget 3. Temporary 4. Profit 5. Deferred

Ex. 16. The new head of your financial department wants to know about the taxation system in your country. He also heard that the taxation system is closely connected with the financial reporting requirements. Write a report to him explaining the major points and referring to the relevant laws. Write 150-200 words.