Glossary

A list of the debts currently owed by a person or business, mainly for the purchase of services, inventory, and supplies.

A list of the money owed on current account to a creditor, which is kept in the normal course of the creditor’s business and represents unsettled claims and transactions.

All documents and books used in the preparation of the tax return and all financial statements, including general ledger, subsidiary ledgers, sales slips, and invoices.

Examination and verification carried out by an outside agency (such as an accountancy firm or the tax authorities) of a taxpayer’s books and accountants and/or the general accuracy of returns and declarations, either as a routine operation, or where evasion is suspected.

A term that is difficult to define but which is generally used to describe the arrangement of a taxpayer’s affairs that is intended to reduce his tax liability and that although the arrangement could be strictly legal it is usually in contradiction with the intent of the law it purports to follow. Cf. evasion.

An array of rectangular marks and spaces in a predetermined pattern. Usually used for automatic product or shipment identification.

BEPS is an OECD initiative, approved by the G20, to identify over a period to December 2015, ways of providing more standardised tax rules globally. BEPS is a term used to describe tax planning strategies that rely on mismatches and gaps that exist between the tax rules of different jurisdictions, to minimise the corporation tax that is payable overall, by either making tax profits “disappear” or shift profits to low tax operations where there is little or no genuine activity.

Well-known cryptocurrency.

The specific collection of technologies used by Bitcoin’s ledger, a particular solution. Note the currency itself is one of these technologies as it provides the miners with the incentive to mine.

The generic name for the family of technologies and solutions that provide the same functionality as bitcoin, but which use different approaches to realising the functionality, for example via alternate algorithms. Variations are:

The rate at which the signal changes when data is transmitted. It is often the same as the number of bits per second.

The practice of buying and selling between companies through the use of electronic transactions.

The practice of buying and selling between company and customer (final user) through the use of electronic transactions.

The practice of buying and selling between company and government entity through the use of electronic transactions.

Statement of the financial position of a business as of a particular date. The statement will show the business’s assets in one column and its liabilities and owner’s equity in another column.

A device which enables the turnover recording of the articles entered into cash register’s article base; it also enables client’s monitoring of the article turnover on the screen and the printed piece of paper with the printing of the control paper tape at the same time; it also enables daily registering of the achieved recorded turnover and achieved refound turnover in the memory.

A person who records the articles on cash register.

Certified Invoicing System, means an electronic system designated for use in business for efficiency management controls in areas of sales analysis and stock control system which confirms the requirements specified by the Authority.

A set of rules defining format of the interchanged data during messages exchange between devices. The protocol must define the syntax, semantics, synchronization of communication.

The value of imported goods which includes cost, insurance and freight.

Tax based on a selective number of commodities.

Forum to resolve disputes arising from the application and/or interpretation of a double tax treaty. Both treaty countries appoint a representative (frequently the Ministry of Finance or its authorized representative) as the CA to assist aggrieved taxpayers by acting as the official liaison with the foreign CA. The CA is generally indicated in the definitions sections of tax treaties.

Tax generally intended to fall on the ultimate consumption of goods and services.

Taxes on goods imported into a country.

Numbered keys representing categories of products – diary products, for instance, which can include cheese, milk, yogurt, etc.

A company or physical person registered in country who is having distribution agreement with Supplier and a license by Authority to sell.

The translation of scrambled or secretly coded data at the receiving end of an encrypted transmission (see also Encryption).

A computer-based record or electronic message issued by an entity that (1) identifies the entity issuing it; (2) names or identifies a certificate holder; (3) contains the public key of the certificate holder; (4) identifies the certificate’s validity period and (5) is digitally signed by the entity issuing it.

An electronic signature that can be used to authenticate the identity of the issuer of the receipt and to ensure that the original content of the data that has been produced is unchanged.

Consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. There is no central administrator or centralised data storage.

The postponement of tax payments from the current year to a later year. A number of countries have introduced legislation to counter the kind of tax avoidance whereby a taxpayer obtains a deferment of tax which is not intended by law. Ex) CFC legislation.

Term used to describe income which will be realized at a future date, thus delaying any tax liability.

An accounting technique in which the cost of an asset is allocated over its useful life.

An official order or instruction.

Direct taxes are taxes imposed on income, capital gains and net worth. Gift tax, death duties and property tax are also considered direct taxes.

Amount by which the face value of a debt obligation exceeds its issue or selling price.

A person’s domicile in English common law is his permanent home, the place to which he always intends to return. Residence is the place where an individual lives for a certain period of time, while domicile is the place where an individual makes his permanent home.

Zone usually located next to an international port or airport where imported goods may be unloaded, stored and reshipped without payment of customs duties or other types of indirect taxes, provided the goods are not imported.

Conducting business between computers through the use of digital exchange.

The computer-to-computer transfer of business transaction information using standard, industry-accepted message formats.

The process of transforming clear text (data in its original form) into cipher text (the output of a cryptographic algorithm) for security or privacy.

An open standard for describing data defined by the World Wide Web Consortium (W3C).

Income or compensation derived from personal services in an employment, trade, business, profession or vocation.

Sales revenue less cost of sales, operating expenses, and interest, before taxes have been paid.

The rate at which a taxpayer would be taxed if his tax liability were taxed at a constant rate rather than progressively. This rate is computed by determining what percentage the taxpayer’s tax liability is of his total taxable income.

In general for tax purposes, an organization, person or party that possesses separate existence. Options include corporations, partnerships, estates and trusts.

Tax imposed for environmental reasons, e.g. to provide an incentive to reduce certain emissions to an optimal level or taxes on environmentally harmful products.

A term that is difficult to define but which is generally used to mean illegal arrangements where liability to tax is hidden or ignored, i.e. the taxpayer pays less tax than he is legally obligated to pay by hiding income or information from the tax authorities.

A tax imposed on an act, occupation, privilege, manufacture, sale, or consumption.

Term used to describe income which is exempt, i.e. not included, in the calculation of gross income for tax purposes.

Tax laws frequently provide specific exemptions for persons, items or transactions, etc. which would otherwise be taxed. Exemptions may be given for social, economic or other reasons. In some cases exemption is used to describe relief from other administrative rules.

Tax levied on exports of basic commodities entering into world trade, such as rubber, copper, palm oil, sisal, tea, cocoa and coffee.

A procedure of putting the fiscal cash register into the function of turnover recording which is agreeable to this law.

Fiscal country is a term used for a country which has adopted fiscalization as a mean to control taxpayers, usually in retail and hospitality sectors.

Are special documents defined by Fiscal Law which are printed/issued by Fiscal Products such as fiscal receipt, reclaimed receipt, balance, daily and periodical reports, etc.

A government’s requires to keep track of all sales generated revenue. Fiscal law defines the terms of obligation of fiscal systems usage. Generally it is amendment to VAT Regulation that obliges taxpayers to use specialized equipment prescribed by Revenue Authority.

Are special products defined by Fiscal law: fiscal cash register, terminal, software application, etc.

Device with firmware functionality as cash registers with fiscal memory, but without the same user interface, instead it is connected to adjusted Point of Sale system, replacing the slip printer as receipt issuing mechanism.

Represents the combination of fiscal products defined by Fiscal Law.

A representation of graphical symbol which is printed at the end of every fiscal document, while the horizontal and vertical dimensions of the fiscal logo are equal.

A certified retail receipt or a wholesale invoice (where required) or a receipt for the provision of services provided to the client (private individual or businessman, as applicable) which integrity can be somehow verified by Authority. Fiscal Logo is manadatary.

From Chinese language it can be literally translated into the word invoice. It’s a Chinese-oriented special format, proof of transaction, which carries the essential information for taxation purposes.

Is the non-volatile memory unit in a form of EPROM or PROM which stores information as read-only data for the entire lifetime of the memory. The fiscal memory is installed into the machine’s enclosure and usually implemented in such way so its removal is impossible without breaking the seal or without destroying the base plate of the enclosure.

Screw connecting upper and bottom cabinet located in a visible place, covered with wax seal that has to be broken in order for someone to unscrew and gain access to internal parts of the fiscal device

In federal states, taxation may exist on two levels: taxation by the federation or confederation, and taxation by the state or provinces.

An examination of a tax return by tax authorities at the taxpayer’s place of business.

Method of valuing inventory on the basis of “first in, first out”, where goods or materials purchased first are regarded as those which are sold first.

Under tax treaties the withholding tax charged by the country of source may be limited to a rate lower than the rate which would be charged in other circumstances – this reduced rate is then the final tax in the country of source.

Any 12-month period which is set for accounting purpose of an enterprise.

A tax applied at the same rate to all levels of income. It is often discussed as an alternative to the progressive tax.

Tax fraud is a form of deliberate evasion of tax which is generally punishable under criminal law. The term includes situations in which deliberately false statements are submitted, fake documents are produced, etc.

Unique number that is assigned to locations to enable them to be identified uniquely worldwide. These global location numbers can be used to identify any legal, physical and functional locations. Global locations numbers are reference keys to computer files where information about the company or location can be found.

A standard way of categorizing products that provides a way to link different company classification systems and offers a common language for collaborative business processes.

A worldwide network of standards bodies and service providers which develops global supply chain standards and solutions used by over one million companies for bar coding, electronic business messaging, data synchronization and through the EPCglobal Network, radio frequency identification.

The period following the due date of taxes during which legal action for recovery of delinquent taxes will not be instituted and interest will not commence to run.

Gross receipts, whether in the form of cash or property, of the taxpayer received as compensation for independent personal services, and the gross receipts of the taxpayer derived from a trade, business or services, including interest, dividends, royalties, rentals, fees or otherwise.

HTTPS is a combination of the Hypertext Transfer Protocol with the SSL/TLS protocol to provide encryption and secure identification of the server.

Statement showing the results of a business operation for a particular period of time. The statement will show the business’s revenues and expenses.

Amount of money received by persons or entities as compensation for damages or for losses incurred.

Costs that cannot be identified in relation to a particular activity but that, nevertheless, are related to the direct costs (e.g. overhead expenses, costs of supporting departments, and a proper share of research and development (R&D) costs).

Tax imposed on certain transactions, goods or events. Examples include VAT, sales tax, excise duties, stamp duty, services tax, registration duty and transaction tax.

Term used in connection with VAT to denote the tax embodied in purchases made by a trader or entrepreneur who will usually be able to obtain a credit for the tax that his suppliers have paid on the goods supplied to him which form his “inputs”.

Inability to pay debts when due.

Literary, dramatic, musical, artistic and scientific works are intellectual property which is protected by copyright, patent, registered design, trade mark, etc.

Traditionally, international taxation refers to treaty provisions relieving international double taxation. In broader terms, in includes domestic legislation covering foreign income of residents (worldwide income) and domestic income of non-residents.

Method of applying VAT to the price at which the goods or service are invoiced, with a deduction for the tax (if any) charged at previous stages.

Term used in the context of transfer pricing to refer to a company established in a low-tax or no-tax jurisdiction for the purpose of shifting profits to that jurisdiction.

A copy of the receipt for the user. Often used for tax purposes. Journal can be printed on the second printer print head or stored on electronic journal media.

The power, right, or authority to interpret and apply tax laws or decisions.

Providing information from device internal memory to a paper or removable storage media (SD card, flash drive, etc). Local audit requires the Tax Officer to do on-site visit to the location of device installation. The Tax Officer then interacts with device in order to collect data. Most common solution is for inspector to insert memory card (SD card, USB flash/memory stick…) into device and wait until data is copied, in which case all the data must be encrypted and cannot be read by unauthorized parties.

Term used in relation to the importation of goods which means the sum total of the cost of the goods concerned, the amount of customs duties levied on those goods and the expense incurred in unloading them.

In general, a lease is a contract in respect of real or personal property, under which the owner of the property grants to another the right to possess, use and enjoy the property for a specified period of time in exchange for periodic payments.

In countries where there is a central or federal government and separate levels of government at state, provincial, county or city levels, taxes levied at the lower levels of government are commonly referred to as “local” taxes.

Opportunities available in tax law to minimize a taxpayer’s tax burdens.

Tax on the sale of lots or on the receipt of prizes after the drawing of lots.

Indirect ad valorem tax imposed on supplies of specific non-essential and normally expensive commodities that are arbitrarily considered (e.g. toiletries, cosmetics, jewellery, pearls and precious stones and metals, etc.).

A company registered as a producer of the particular type of fiscal device or software.

Improper or immoral conduct of a professional in the performance of his duties, done either intentionally or through carelessness or ignorance; commonly applied to accountants, tax preparers, and lawyers to denote negligent or unskilful performance of duties where professional skills are obligatory.

In certain countries corporations are always liable to a certain amount of annual tax, regardless of whether they have realized a profit.

Indirect tax charged on the same goods at successive stages of production and distribution.

A proposed system of providing financial aid to poverty-level individuals and families, using the mechanisms already in place to collect income taxes. Low-income person or family would receive a direct subsidy, called a negative income tax.

A lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the given circumstances.

Net income is gross income less deductible income-related expenses. Many countries levy income tax on this basis.

Difference between receipts from business transactions and deductible business expenses, subject to any adjustments for tax purposes.

Many European countries impose the net worth tax in the context of property taxation. The taxable base for resident taxpayers is normally the taxpayer’s worldwide net worth, i.e. total assets less liabilities along with deductions and exemptions specially allowed by tax laws.

The written decision of the tax authorities after a review of a taxpayer’s return, whereby the amount of taxable income is determined and the amount of tax due is calculated.

Tax offences may be specified in the tax laws covering matters such as late filing, late payment, failure to declare taxable income or transactions, and negligent or fraudulent misstatements in tax declarations.

An examination at a tax authority’s office, generally of an uncomplicated tax matter

Term usually applied to a company registered in a country (often a tax haven) other than the country or countries in which it carries on its business activities. An offshore (or non-resident owned) company is commonly used for captive insurance, marketing abroad, international shipping and tax shelter schemes.

In the VAT context, a VAT exempt entrepreneur sometimes can claim to be subject to VAT, the advantage being that to be entitled to his input tax against his output tax.

Term which refers to the tax treatment of a country’s residents (and perhaps citizens) doing business and investing abroad.

Payments on cash register as for example: cash, cheques, card.

The process of testing a part of the final system as a gauge to determine the viability of a concept prior to implementing the system for full production.

Income in respect of which, broadly speaking, the recipient does not participate in the business activity giving rise to the income, e.g. dividends, interest, rental income, royalties, etc.

Tax charged on an employer’s payroll (i.e. gross salaries, wages and other remunerations) paid to his employee without regard to their domicile, family status or other individual circumstances.

Administrative penalties are imposed for tax offences, such as failure to make a timely return or payment, negligence, and making a false return or statement. They take the form of additions to the tax and are assessed as part of the tax. Criminal penalties, on the other hand, are enforceable only by prosecution. A prison sentence may be imposed for serious tax fraud.

Latin for “for each person”.

Latin for “by the day”; referring to daily allowance, usually for travel, entertainment, employee compensation, or miscellaneous out-of pocket expenses incurred while conducting a business transaction.

Profit after deducting depreciation, costs, etc., but before deducting taxes.

Tax imposed on business profits in addition to ordinary income tax or as distinct from income tax imposed on other forms of income.

Group of taxes imposed on property owned by individuals and businesses based on the assessed value of each property.

Assessment of tax made before it is possible to make a final assessment which is often based on, for example, estimated figure or the previous year’s figures.

The formal legislative consent or acceptance required by the constitution or domestic law of a country before a treaty to which it is a party can come into effect.

From the taxpayer’s point of view, this may mean a refund of tax. From the tax authorities’ point of view, it may mean the collection of tax which is in arrears.

In many countries the ordinary rates of tax charged under various tax laws may be reduced in particular situations. For example, under tax treaties, reduced withholding tax rates often apply to dividends, interest and royalties.

A sales refund is a compensation paid to a customer for over-invoicing or for returned goods. Merchandise that is sent back by a buyer to the seller, usually for one of the following reasons:

Excess quantity shipped
Excess quantity ordered
Defective goods
Goods shipped too late
Product specifications are incorrect
Wrong items shipped
Seller may issue refunds to customers based on internal refund policies.

The payment of an employee or another party for incurred expenses or losses.

Single-stage tax on the sale of goods to ultimate consumers, whether by retailers or other traders.

The portion of a corporation’s after-tax profits that is not distributed to the shareholders, but rather is reinvested in the business.

Declaration of income, sales and other details made by or on behalf of the taxpayer. Forms are often provided by the tax authorities for this purpose.

Payments of any kind received as consideration for the use of, or the right to use intellectual property, such as a copyright, patent, trade mark, design or model, plan, secret formula or process.

Decisions or opinions of the tax authorities in respect of actual fact situations which come before it as part of an assessment procedure or in response to taxpayer questions.

Sales Data Controller is an electronic device connected to Certified Invoicing System, designed to receive data from CIS, performs data processing and generates response data that is sent back to CIS for further actions. Response data provides authenticity of receipt data. SDC also saves receipts to its own internal memory, enables audit and has possibility to remotely send data to Authority server.

A company or physical person registered in country licensed by Authority for holding certificate for fiscal device, manufactured in or outside of the country, and selling it to the market as a representative of the manufacturer or manufacturer.

Tax imposed as a percentage of the price of goods (and sometimes services). The tax is generally paid by the buyer but the seller is responsible for collecting and remitting the tax to the tax authorities.

System under which the taxpayer is required to declare the basis of his assessment (e.g. taxable income), to submit a calculation of the tax due and, usually, to accompany his calculation with payment of the amount he regards as due. The role of tax authorities is to check (perhaps in random cases) that the taxpayer has correctly disclosed his income.

Referring to persons who work for themselves and are not employed by another. The owner-operator of a sole proprietorship or a partner is considered self-employed.

Describes the ratio (usually expressed as a percentage) at which a business or person is taxed.

Is a group each good or service must belongs to. It is recognized by Tax – NO (number 0 to 8), Tax-letter one letter (symbol) as stated in Law&Regulation, Tax-Rate, Tax-description (usually
General – Higher Tax, Lower Tax, Free of Tax, Out of Tax, and sometimes Special Tax.

The thing or amount on which the tax rate is applied, e.g. corporate income, personal income, real property.

Term used to define an occurrence which affects the liability of a person to tax.

The body responsible for administering the tax laws of a particular country or regional or local authority.

For public finance purposes the tax burden, or tax ratio, in a country is computed by taking the total tax payments for a particular fiscal year as a fraction or percentage of the Gross National Product (GNP) or national income for that year.

Document issued to a taxpayer by the tax authorities certifying that the taxpayer has either paid all taxes due or that he is not liable to any taxes. In certain countries a tax clearance certificate must be produced before a person can leave the country.

Degree to which a taxpayer complies (or fails to comply) with the tax rules of his country, for example by declaring income, filing a return, and paying the tax due in a timely manner.

See Return

Generally speaking, a natural or legal person who severs all ties which make him fiscally resident in a particular country and moves to another jurisdiction for tax reasons.

This term denotes special preferences provided in income tax laws which depart from the normal tax structure and which are designed to favour a particular industry, activity or class of taxpayer.

Tax haven in the “classical” sense refers to a country which imposes a low or no tax, and is used by corporations to avoid tax which otherwise would be payable in a high-tax country. According to OECD report, tax havens have the following key characteristics; No or only nominal taxes; Lack of effective exchange of information; Lack of transparency in the operation of the legislative, legal or administrative provisions.

Fiscal policy measure often found in developing countries. A tax holiday offers a period of exemption from income tax for new industries in order to develop or diversify domestic industries.

Agreement which allows governments to share tax and other information with a view to combating tax evasion, drug trafficking, etc.

In some countries taxpayers are given an identification number which must be used when filing a tax return and assessing taxes and for all other correspondence between the taxpayer and the tax authorities.

Generic term to describe all methods used to reduce tax liability without regard to the particular way it is accomplished.

Obligation usually imposed on tax officials not to reveal particulars about the identity and personal circumstances of taxpayers, or about any of the various aspects governing their tax liability, except in certain strictly limited circumstances.

(1) An opportunity to use, quite legitimately, a relief or exemption from tax to pay less tax than one might otherwise have to pay in respect of similar activities, or the deferment of tax.
(2) The polite term usually given to a contrived scheme to avoid or reduce a liability to taxation.

Level (of income, capital, sales, etc.) at which tax commences to be levied.

An agreement between two (or more) countries for the avoidance of double taxation. A tax treaty may be titled a Convention, Treaty or Agreement.

Term used in the context of personal income tax, where taxation may be imposed by reference to separate individuals or to a group of individuals treated as one unit.

Many countries allow temporary importation without levying customs duties and turnover tax on items which are to be within their borders for only a short time.

A business, profession, or occupation. A trade often implies a skilled handicraft, which is pursued on a continuing basis, such as carpentry.

Legally registered name, word, symbol or design which identifies the goods or services of a particular manufacturer, business or company.

Tax that uses a specific type of transaction as its object, e.g. sales tax, immovable property transfer tax, etc.

A transfer price is the price charged by a company for goods, services or intangible property to a subsidiary or other related company. Abusive transfer pricing occurs when income and expenses are improperly allocated for the purpose of reducing taxable income.

Adjustment made by the tax authorities after making a determination that a transfer price in a controlled transaction between associated enterprises is incorrect or where an allocation of profits fails to conform to the arm’s length principle.

Tax levied on vehicles, ships and aircraft using public highways, rivers, and airports maintained by the government.

Volume of business of an enterprise as set forth in the profit and loss account. It is usually measured by reference to the gross receipts, or gross amounts due, from the sale of goods or services, etc. supplied by the entity.

General term used to refer to the different forms of consumption and sales taxes.

The organization that oversees the standards for product identification and related electronic communications. The UCC oversaw the Universal Product Code (UPC) in the United States – now superseded by GTINs – as well as Uniform Communication Standards (UCS) for EDI in the grocery industry and Warehouse Information Network Standards (WINS) in the warehousing and transportation industry.

Tax on goods which are used within the taxing jurisdiction although the goods were purchased in another jurisdiction.

Specific type of turnover tax levied at each stage in the production and distribution process. Although VAT ultimately bears on individual consumption of goods or services, liability for VAT is on the supplier of goods or services. VAT normally utilizes a system of tax credits to place the ultimate and real burden of the tax on the final consumer and to relieve the intermediaries of any final tax cost.

A standard means of interoperating between different software applications, running on a variety of platforms and/or frameworks, over the Internet.

Tax – levied at source as a withholding on wages; taxes thus withheld are usually offset against final income tax liability (if any).

Tax on income imposed at source, i.e. a third party is charged with the task of deducting the tax from certain kinds of payments and remitting that amount to the government. Withholding taxes are found in practically all tax systems and are widely used in respect of dividends, interest, royalties and similar tax payments. The rates of withholding tax are frequently reduced by tax treaties.

The term is used in relation to VAT, where the rate of tax which is in principle levied but at a rate of 0% so that in effect no tax is payable, but will result in refunds of input tax credits.

Advance Encryption Standard

Automated Clearing House

Block Check Character

Certified Cash Register

Certified Invoicing System

Cash Register System

Control Unit (Sweden)

Data Communication Equipment devices

Data Terminal Equipment devices

Elliptic curve cryptography

Electronic Cash Register, does not have fiscal memory

Electronic Fiscal Data

Electonic Journal Data

Electronic Signature Device (Greece, Kenya, Tanzania, Zimbabwe)

Enterprise Resource Planning

Electronic Data Interchange

Electronic Data Interchange For Administration, Commerce and Transport

Electronic payment in which funds are transferred between bank accounts at different financial institutions

Fiscal cash register

Fiscal data module (Belgium)

File Transfer Protocol

Government Data Record

Global Location Number

Global Product Classification

Global Trade Item Number

International Data Exchange Association

Machine Registration Code

Price look up – usually refers to item description

Point-Of-Sale, Point-Of-Service

Radio Standard or Recommended Standard – serial binary data communication

Real-time clock

Radio Frequency Identification

Sale Data Controller

See PLU

Sales Recording Module (Quebec)

Tax (TAXPAYER’S) Identification Number

Tax Identification Modul (Insika, smart card)

Trading Data Interchange (abbr for EDI common in Europe)

Unit Of Measure

Uniform Code Council

VAT Signing Card (Belgium)

Value-Added Tax

Virtual Private Network

Extensible Markup Language