# Taxes Lexicon

English terminology for tax law, tax procedure, tax litigation, and the tax aspects
of corporate transactions. Tax is heavily jurisdiction-specific: this main lexicon
gives the neutral English vocabulary; the per-language sub-lexicons map jurisdiction-
specific tax names (IRES, IS, KSt, IRC, 法人税, 企业所得税, etc.) onto these terms
and flag where a calque would be misleading.

## Scope and cross-references

This lexicon covers:

- Categories of tax (direct, indirect, withholding, payroll, transactional)
- Tax base, deductions, credits, exemptions, rates
- Tax residency, source rules and permanent establishment
- Transfer pricing and intra-group transactions
- Double taxation conventions and relief mechanisms
- Tax compliance: returns, filings, payments, refunds
- Tax authorities, procedure, audits, rulings, settlements
- Tax litigation and appeals
- Anti-avoidance rules and tax planning concepts
- M&A and reorganization tax (interface — full M&A drafting terms in
  `corporate-ma-jv.md`)
- Indirect tax in commercial contracts (VAT, customs, excise)
- Personal taxation, inheritance, gift, wealth tax
- Tax incentives, R&D credits, free zones

For tax warranties, tax indemnities and tax covenant drafting in M&A documents, see
the **Tax-related M&A Terms** section of `corporate-ma-jv.md` and use this lexicon
for the substantive tax vocabulary.

## Categories and Headline Taxes

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| direct tax | Tax on income, profit or wealth, paid by the person bearing the burden | — |
| indirect tax | Tax collected by an intermediary (typically on transactions) | — |
| corporate income tax (CIT) | Tax on the worldwide or domestic profits of companies | "company tax" (informal); "corporation tax" only in UK contexts |
| personal income tax (PIT) | Tax on the income of individuals | "personal tax" alone (ambiguous) |
| withholding tax (WHT) | Tax withheld at source on certain payments (dividends, interest, royalties, services) | "retention tax" (calque) |
| value added tax (VAT) | The EU-style multi-stage indirect tax on consumption | "value-add tax" |
| goods and services tax (GST) | The non-EU equivalent (e.g., Australia, India, Canada, Singapore) | Do not call EU VAT "GST" or vice versa |
| sales tax | The single-stage US-style consumption tax | Do not use as a synonym for VAT |
| excise duty | Tax on specified goods (tobacco, alcohol, fuel, energy products) | "excise tax" only in US contexts |
| customs duty | Tax on imported goods at the border | "import duty" is acceptable; avoid "customs tax" |
| stamp duty | Tax on the execution of certain instruments or transactions | — |
| stamp duty land tax / real estate transfer tax | Tax on the transfer of immovable property | — |
| registration tax / registration duty | Tax payable on the registration of deeds or transactions | "registration fee" (that is the administrative charge, not the tax) |
| capital gains tax (CGT) | Tax on gains realized on the disposal of capital assets | — |
| inheritance tax / estate tax | Tax on the transfer of wealth on death | "succession duty" only in historic contexts |
| gift tax | Tax on lifetime gratuitous transfers | — |
| wealth tax | Recurring tax on the net wealth of individuals | — |
| financial transaction tax (FTT) | Tax on certain financial transactions (e.g., equity trades) | — |
| digital services tax (DST) | Tax on revenues of certain digital businesses | — |
| environmental tax / green tax | Tax on activities with environmental impact | — |
| local tax / municipal tax | Tax levied by sub-national authorities | — |
| regional tax | Tax levied by a region/state within a federal or quasi-federal system | — |
| solidarity surcharge / surtax | An additional charge on top of a primary tax | — |
| social security contributions | Mandatory contributions to social security schemes (employer and employee) | "social charges" (calque) |
| payroll tax | Tax assessed on wages paid by an employer | — |

## Tax Base, Rates and Computation

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| tax base / taxable base | The amount on which the tax is calculated | "imposable base" (calque) |
| taxable income | Income subject to tax after deductions and exemptions | — |
| gross income | Income before deductions | — |
| net income | Income after deductions | — |
| profit before tax (PBT) | Accounting profit before the tax expense | — |
| profit after tax (PAT) / net profit | Accounting profit net of tax | — |
| operating profit / EBIT | Earnings before interest and tax | — |
| EBITDA | Earnings before interest, tax, depreciation and amortization | — |
| deduction | An item subtracted from income in computing the tax base | — |
| allowable deduction | A deduction permitted by law | — |
| non-deductible expense | An expense disallowed for tax purposes | — |
| depreciation | Periodic write-down of tangible fixed assets | — |
| amortization | Periodic write-down of intangibles | — |
| accelerated depreciation | Faster write-down permitted by tax law as an incentive | — |
| tax-free / tax-exempt | Not subject to tax | — |
| exemption | A statutory carve-out from the tax base | — |
| participation exemption | Relief that exempts qualifying dividends or capital gains from subsidiaries | — |
| tax credit | A direct reduction of tax payable | — |
| foreign tax credit (FTC) | Credit for tax paid abroad | — |
| refundable tax credit | A credit refundable in cash if it exceeds the tax due | — |
| non-refundable tax credit | A credit that can only reduce tax to zero | — |
| tax allowance | A statutory amount that reduces the tax base or tax due | — |
| personal allowance / basic allowance | Income exempt from PIT for individuals | — |
| tax rate | The percentage applied to the tax base | — |
| nominal / statutory tax rate | The rate set by law | — |
| effective tax rate (ETR) | Tax expense divided by pre-tax profit | — |
| marginal tax rate | The rate applicable to the next unit of income | — |
| flat rate tax | A single rate regardless of income level | — |
| progressive tax | A tax with rates rising with income | — |
| regressive tax | A tax that takes a higher proportion of low incomes | — |
| tax brackets | Income bands to which different rates apply | — |
| minimum tax | A floor below which the tax cannot fall | — |
| alternative minimum tax (AMT) | A parallel computation ensuring a minimum tax | — |
| global minimum tax / Pillar Two | The OECD-led minimum effective tax rate for multinationals | — |
| tax loss / fiscal loss | A loss for tax purposes in a given period | — |
| loss carry-forward | Use of past losses against future profits | "loss carry-over" |
| loss carry-back | Use of current losses against past profits | — |
| group relief / loss surrender | Transfer of losses within a tax group | — |
| tax consolidation / tax group | A regime allowing group entities to be taxed as a single unit | "fiscal unity" only in NL/BE contexts |

## Withholding Tax

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| withholding tax (WHT) | Tax retained at source by the payer | — |
| domestic withholding rate | The rate applicable absent treaty relief | — |
| treaty rate / treaty-reduced rate | The lower rate available under a double tax treaty | — |
| beneficial owner | The person entitled to the income for treaty purposes | "beneficiary" (vague) |
| beneficial ownership certificate | Documentary evidence supporting treaty access | — |
| certificate of tax residence | Document confirming tax residency for treaty purposes | "residency certificate" alone is ambiguous |
| treaty relief at source | Application of treaty rate at the time of payment | — |
| refund procedure | Recovery of WHT withheld at the higher domestic rate | — |
| gross-up clause | Contractual clause obliging the payer to bear the WHT | — |
| net of withholding tax | Amount payable after deduction of WHT | — |
| free of withholding tax | Amount payable without any WHT deduction | — |
| Parent-Subsidiary Directive | EU directive eliminating WHT on qualifying intra-EU dividends | — |
| Interest and Royalties Directive | EU directive eliminating WHT on qualifying intra-EU interest and royalties | — |

## Tax Residency, Source and Permanent Establishment

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| tax residency | The jurisdiction(s) where a person/company is taxable on worldwide income | — |
| tax resident | A person/company subject to worldwide taxation in a given jurisdiction | — |
| non-resident | A person/company taxable only on source income | — |
| dual residence | Residency in two jurisdictions | — |
| tie-breaker rule | Treaty rule resolving dual residence | — |
| place of effective management (PoEM) | The place where key management decisions are taken | "actual management seat" |
| center of vital interests | Treaty test for individual residency | — |
| habitual abode | Treaty test based on where the person is physically present | — |
| domicile | A common-law concept, distinct from residence (used mainly in UK PIT, IHT) | Do not equate to "tax residence" |
| source of income | The jurisdiction from which income is deemed to arise | — |
| source rules | Rules allocating income to a jurisdiction | — |
| permanent establishment (PE) | A fixed place of business creating taxable nexus | "stable organization" (calque) |
| dependent agent PE | A PE arising through an agent who habitually concludes contracts | — |
| construction PE | A PE created by a long-running construction or installation project | — |
| service PE | A PE arising through prolonged service activity in the source state | — |
| preparatory or auxiliary activities | Activities that do not by themselves create a PE | — |
| nexus | The connection that gives a jurisdiction taxing rights | — |
| economic nexus / digital nexus | Nexus based on economic presence rather than physical presence | — |

## Double Taxation and Treaty Relief

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| double tax treaty (DTT) / double tax convention (DTC) | Bilateral treaty allocating taxing rights and providing relief | "convention against double taxation" (calque) |
| OECD Model Tax Convention | The OECD model used by most modern treaties | — |
| UN Model Tax Convention | The UN model, more source-favoring | — |
| Multilateral Instrument (MLI) | The BEPS multilateral convention modifying covered DTTs | — |
| principal purpose test (PPT) | The MLI anti-abuse test denying treaty benefits | — |
| limitation on benefits (LoB) | A clause restricting treaty access to qualified persons | — |
| tax sparing | Treaty mechanism preserving the benefit of host-country incentives | — |
| credit method | Relief by allowing a credit for foreign tax paid | — |
| exemption method | Relief by exempting foreign-source income from domestic tax | — |
| double taxation | Taxation of the same income twice (juridical or economic) | — |
| juridical double taxation | Same person taxed twice on the same income | — |
| economic double taxation | Different persons taxed on the same economic income | — |
| mutual agreement procedure (MAP) | Treaty procedure to resolve double taxation | — |
| arbitration clause | Treaty mechanism for binding resolution if MAP fails | — |
| competent authority | The tax authority designated to apply treaty procedures | — |

## Transfer Pricing and Anti-Avoidance

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| transfer pricing (TP) | Pricing of transactions between related parties | — |
| arm's length principle | Pricing as if between unrelated parties | "at arms-length" (typo); "arm's length basis" is also acceptable |
| comparable uncontrolled price (CUP) | TP method using prices of comparable uncontrolled transactions | — |
| resale price method | TP method based on resale margin | — |
| cost plus method | TP method based on costs plus a mark-up | — |
| transactional net margin method (TNMM) | TP method based on net margins | — |
| profit split method | TP method allocating combined profits | — |
| TP documentation | Master file, local file and CbC report | — |
| master file | OECD-prescribed group-level TP documentation | — |
| local file | OECD-prescribed entity-level TP documentation | — |
| country-by-country (CbC) report | Group-level reporting of revenues, profits and tax by jurisdiction | — |
| advance pricing agreement (APA) | Pre-agreed TP methodology with the tax authority | — |
| unilateral / bilateral / multilateral APA | APA between one, two or more jurisdictions | — |
| controlled foreign company (CFC) rules | Rules attributing low-taxed foreign subsidiary income to the parent | — |
| general anti-avoidance rule (GAAR) | Statutory rule denying tax advantages from abusive arrangements | — |
| specific anti-avoidance rule (SAAR) | Targeted statutory anti-avoidance rule | — |
| substance over form | Doctrine prioritizing economic substance over legal form | — |
| economic substance test | Test requiring genuine economic activity | — |
| beneficial ownership requirement | Treaty/EU requirement for genuine entitlement to income | — |
| treaty shopping | Use of conduit structures to access treaty benefits | — |
| BEPS | Base Erosion and Profit Shifting (OECD project) | — |
| hybrid mismatch | Tax outcome arising from differing characterization between jurisdictions | — |
| anti-hybrid rules / ATAD II | EU anti-hybrid rules | — |
| earnings stripping rule / interest limitation | Restriction on the deductibility of interest (e.g., 30% EBITDA, ATAD I) | "thin cap rule" is broader/older terminology |
| thin capitalization | Excessive intra-group debt financing for tax reasons | — |
| exit tax | Tax on unrealised gains when a person/company emigrates | — |
| step-up in basis | Revaluation of assets to fair value for tax purposes | — |
| safe harbor | Predefined rule deemed compliant with tax requirements | — |

## Tax Compliance and Procedure

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| tax return | The taxpayer's declaration filed with the tax authority | "fiscal return" (calque) |
| tax filing | The act of submitting the return | — |
| filing deadline / due date | The statutory deadline for filing | — |
| extension of time / filing extension | Additional time to file | — |
| tax payment | Payment of the tax due | — |
| tax assessment | The tax authority's determination of tax due | — |
| self-assessment | Regime in which the taxpayer computes its own liability | — |
| advance payment / installment | Payment on account during the tax year | source-language term left untranslated |
| balancing payment | Final payment with the return | — |
| tax refund | Refund of tax overpaid | — |
| set-off / offset | Use of a refund or credit against other tax due | — |
| tax invoice | An invoice meeting VAT/GST requirements | — |
| simplified invoice | A reduced-content invoice permitted under VAT rules | — |
| reverse charge | VAT mechanism shifting the liability to the recipient | — |
| input VAT | VAT incurred on purchases | — |
| output VAT | VAT charged on sales | — |
| VAT recovery / VAT deduction | Deduction of input VAT against output VAT | — |
| VAT registration | Registration as a taxable person for VAT | — |
| VAT identification number / VAT number | The taxpayer's VAT registration number | — |
| EORI number | EU Economic Operators Registration and Identification number (customs) | — |
| Intrastat declaration | EU declaration of intra-Community trade in goods | — |
| EC Sales List / recapitulative statement | Periodic listing of intra-Community supplies | — |
| One Stop Shop (OSS) / Import One Stop Shop (IOSS) | EU VAT simplification regimes for B2C cross-border supplies | — |
| reverse-charge mechanism | Recipient self-accounting for VAT | — |
| zero-rated supply | Supply subject to VAT at 0%, with input VAT recovery | Different from "exempt" |
| exempt supply | Supply outside the scope of VAT, generally without input recovery | — |
| place of supply | The jurisdiction in which a supply is deemed to occur for VAT | — |
| chargeable event | The event triggering VAT | — |
| chargeability of tax / tax point | The moment VAT becomes due | — |

## Tax Authorities, Audits and Disputes

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| tax authority / tax administration | The government body administering taxes | "fiscal authority" (calque) |
| revenue authority / revenue service | Common naming convention (e.g., HMRC, IRS) | — |
| tax inspector / tax officer | An individual official | — |
| tax ruling | A binding interpretation issued by the tax authority | — |
| advance tax ruling / private ruling | A ruling on a contemplated transaction | — |
| public ruling / general guidance | Guidance addressed to taxpayers generally | — |
| tax audit / tax inspection | Examination of a taxpayer's affairs | "fiscal verification" (calque) |
| desk audit | Office-based review of a return | — |
| field audit / on-site audit | An audit conducted at the taxpayer's premises | — |
| information request | Formal request for information | — |
| exchange of information (EoI) | Cross-border information sharing between tax authorities | — |
| automatic exchange of information (AEOI) | Routine cross-border data exchange (CRS, FATCA) | — |
| common reporting standard (CRS) | OECD standard for AEOI on financial accounts | — |
| FATCA | US Foreign Account Tax Compliance Act | — |
| DAC6 / mandatory disclosure regime | EU disclosure of cross-border tax arrangements | — |
| notice of assessment | Formal document notifying the taxpayer of an assessment | — |
| reassessment / amended assessment | A revised assessment | — |
| statute of limitations / limitation period | Period beyond which the tax authority cannot assess | "decadence" (calque); "prescription" only if the source uses a civil-law concept and you flag it |
| tax penalty | A monetary sanction for a tax breach | — |
| late-payment interest | Interest on tax paid after the due date | — |
| late-filing penalty | Penalty for late submission of a return | — |
| understatement penalty | Penalty for under-declaring tax | — |
| voluntary disclosure | Self-correction of past non-compliance | — |
| tax amnesty | A statutory program for past non-compliance with reduced penalties | — |
| settlement / settlement procedure | Negotiated resolution with the tax authority | — |
| objection / administrative appeal | Internal challenge to an assessment | — |
| tax tribunal / tax court | Specialist judicial body for tax disputes | — |
| appeal / judicial appeal | Court challenge to a tax decision | — |
| stay of collection | Suspension of enforcement during a dispute | — |
| security / guarantee for tax | Security required to suspend collection | — |

## Tax in Corporate Transactions (M&A interface)

For full M&A drafting terminology, see `corporate-ma-jv.md`. The terms below are the
substantive tax concepts that recur in deal documents.

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| share deal | Acquisition by transfer of shares | — |
| asset deal | Acquisition by transfer of individual assets | — |
| business transfer / transfer of a going concern (TOGC) | Transfer of an autonomous business unit | — |
| tax-neutral reorganization / qualifying reorganization | A reorganization that does not crystallize tax | "fiscally neutral" (calque) |
| roll-over relief | Deferral of gain by rolling tax basis into replacement assets | — |
| step-up in basis | Revaluation of assets to fair value | — |
| carry-over basis | Continuation of historic tax basis post-transaction | — |
| pre-closing tax period | Tax period(s) ending on or before completion | — |
| straddle period | Tax period spanning the closing date | — |
| tax warranties | Seller warranties as to historic tax position | — |
| tax indemnity / tax covenant / tax deed | Pound-for-pound seller indemnity for pre-closing taxes. Note: in UK M&A practice the standalone instrument is commonly called a "tax deed" (separate from the SPA); in US practice the same protection is typically embedded in the SPA as a "tax indemnity" or "tax covenant". All three are valid usage — pick based on the deal's drafting tradition. | — |
| tax leakage | Erosion of value through transaction-related taxes | — |
| change-of-control restrictions on losses | Limits on use of carried-forward losses after a change of control | — |
| anti-stuffing rules | Rules limiting the contribution of assets to absorb losses | — |
| transfer taxes / dealing taxes | Taxes on the act of transferring assets or shares | — |
| VAT on TOGC | The treatment of a going concern transfer as outside the scope of VAT | — |
| stamp duty / share transfer tax | Tax on share transfers | — |
| real estate transfer tax | Tax on transfers of immovable property | — |
| tax due diligence | Due diligence on the target's tax position | — |
| tax exposure / tax risk | Identified or potential tax liability | — |
| reportable arrangement | A cross-border arrangement reportable under DAC6 / mandatory disclosure | — |

## Personal Taxation

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| employment income | Income from dependent employment | — |
| self-employment income / business income | Income from independent activity | — |
| investment income | Dividends, interest and similar passive income | — |
| capital gains | Gains on disposal of capital assets | — |
| rental income | Income from letting immovable property | — |
| pension income | Income from pensions and annuities | — |
| benefits in kind | Non-cash employment benefits | "fringe benefits" (US) |
| stock options | Rights to acquire shares granted to employees | — |
| restricted stock units (RSUs) | Conditional share awards | — |
| employee share plan / share scheme | Equity-based remuneration plan | — |
| deferred compensation | Compensation paid in a later period | — |
| severance payment / termination payment | Payment on termination of employment | — |
| household tax / family quotient | Family-based PIT computation | — |
| individual taxation / joint taxation | Taxation per individual or per couple | — |
| non-domiciled regime / non-dom | Special regime for non-domiciled UK residents | — |
| inbound expatriate regime / impatriate regime | Special regime for inbound mobile workers | — |
| flat-tax regime for new residents | Lump-sum regimes for high-net-worth individuals (e.g., Italy, CH, PT NHR) | — |
| inheritance and gift tax | Combined heading for transfer-on-death and lifetime transfer tax | — |
| forced heirship | Civil-law rules reserving shares of an estate to certain heirs | — |
| trust / settlor / beneficiary | Common-law trust terminology (often awkward in civil-law translations) | — |

## Tax Incentives and Special Regimes

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| R&D tax credit | Tax credit for research and development expenditure | — |
| patent box / IP box | Reduced rate regime for income from qualifying IP | — |
| innovation income deduction | Belgian-style deduction for innovation income | — |
| investment tax credit | Credit for qualifying capital expenditure | — |
| accelerated depreciation regime | Enhanced first-year allowances for qualifying assets | — |
| free trade zone / free zone | Customs/tax-privileged geographic area | — |
| special economic zone (SEZ) | Designated zone with tax incentives | — |
| tonnage tax regime | Optional shipping-industry regime taxing tonnage rather than profit | — |
| tax holiday | Time-limited exemption from tax | — |
| tax ruling / individual ruling | Binding determination of tax treatment | — |
| group taxation regime | Consolidated taxation of a group | — |
| notional interest deduction (NID) | Deduction for notional interest on equity (e.g., Belgium, Italy ACE) | — |
| allowance for corporate equity (ACE) | Equity-financing relief; available under various national names | — |

## Customs and Excise

| Correct English term | Usage / meaning | Avoid |
|---|---|---|
| customs duty | Duty on imports | — |
| customs value | The value of goods for duty purposes | — |
| customs classification / tariff classification | Assignment of a tariff code | — |
| Combined Nomenclature (CN) | EU customs tariff classification | — |
| Harmonized System (HS) | International tariff classification | — |
| rules of origin | Rules determining the economic nationality of goods | — |
| preferential origin / non-preferential origin | Origin for trade-preference vs general purposes | — |
| binding tariff information (BTI) | Pre-clearance ruling on classification | — |
| binding origin information (BOI) | Pre-clearance ruling on origin | — |
| inward processing | Customs regime for processing imported goods for re-export | — |
| outward processing | Customs regime for processing EU goods abroad and re-importing | — |
| customs warehousing | Storage of non-Union goods without import duty | — |
| authorized economic operator (AEO) | Trusted-trader status | — |
| excise duty | Duty on excisable products | — |
| excisable goods | Goods subject to excise (alcohol, tobacco, energy products) | — |
| suspension regime | Movement of excise goods under duty suspension | — |
| tax warehouse / bonded warehouse | Authorized storage for goods under suspension | — |
| EMCS (Excise Movement and Control System) | EU electronic monitoring of excise movements | — |

## Standard Verbal Anchors

These are standard English formulations used in tax documents and tax clauses:

- "for the avoidance of doubt, all amounts payable under this Agreement are exclusive
  of VAT" (price clauses)
- "the Buyer shall pay any VAT properly chargeable, against a valid tax invoice"
- "all sums payable shall be paid free and clear of any deduction or withholding,
  except as required by law" (gross-up)
- "if any deduction or withholding is required by law, the payer shall pay such
  additional amount as is necessary to ensure that the recipient receives the same
  net amount it would have received in the absence of the withholding"
- "the Seller shall indemnify the Buyer on a pound-for-pound basis against any tax
  liability of the Target arising in respect of any pre-closing tax period"
- "the parties shall co-operate in good faith to mitigate any tax leakage"
- "the parties shall not take any action which would prejudice the application of
  any tax exemption or treaty relief"
- "the parties intend the transaction to qualify for tax-neutral treatment under
  Article [●] of [●]"

## Section Headings

| Correct English heading | Usage |
|---|---|
| TAX DEFINITIONS | Defined-terms section in a tax clause or tax deed |
| TAX WARRANTIES | Seller warranties on tax matters |
| TAX INDEMNITY / TAX COVENANT | Indemnity for pre-closing tax liabilities |
| TAX RETURNS AND CONDUCT OF AUDITS | Allocation of post-closing tax compliance and audit conduct |
| TAX REFUNDS | Allocation of post-closing tax refunds |
| TAX CO-OPERATION | Mutual assistance and information rights |
| GROSS-UP | Withholding tax gross-up clause |
| VAT | VAT treatment clause |
| TRANSFER TAXES | Allocation of transfer/dealing taxes |
| WITHHOLDING TAX CERTIFICATES | Procedural clause on residence certificates etc. |

## Notes

- **Translate the function, not the local label.** Use the neutral English term
  (corporate income tax, withholding tax, VAT, real estate transfer tax) and let
  the per-language sub-lexicon supply the local name. Where a tax has no real
  English equivalent (e.g., Italian IRAP — a regional production tax — or German
  Gewerbesteuer — a municipal trade tax), translate functionally and add a
  translator's note giving the original name.

- **Do not equate VAT, GST and sales tax.** They are different systems. EU/UK
  documents use VAT; Australia/India/Canada/Singapore use GST; US use sales tax.
  Translating a Spanish "IVA" or French "TVA" as "GST" or "sales tax" is wrong.

- **"Withholding tax" vs "retention tax".** "Retention tax" is a calque from
  Romance languages (ritenuta, retención, retenue) and is incorrect English. Use
  "withholding tax" (or "tax withheld at source" in narrative passages).

- **"Stamp duty" vs "registration tax".** UK "stamp duty" is conceptually similar
  to civil-law "registration tax" (registro, droit d'enregistrement, derecho de
  registro), but the technical operation differs. Use the UK term cautiously and
  add the local name on first mention.

- **"Tax authority" / "revenue authority"**: Both are acceptable. Where the source
  document refers to a named authority (Agenzia delle Entrate, Finanzamt, Hacienda,
  HMRC, IRS, 国税庁), keep the local name on first mention with a parenthetical
  English gloss.

- **"Statute of limitations" vs "prescription"**: In civil-law traditions the term
  is *prescrizione / prescription / Verjährung*, which translates literally as
  "prescription". In English tax usage, the term is "statute of limitations" or
  "limitation period". Only use "prescription" if the source materially relies on
  the civil-law mechanism and you note this.

- **Beneficial ownership**: A treaty concept that is widely abused as a literal
  translation of *beneficiario effettivo / bénéficiaire effectif / wirtschaftlich
  Berechtigter*. Distinguish between (i) beneficial ownership for treaty/WHT
  purposes (right to income), and (ii) ultimate beneficial owner (UBO) for AML
  purposes (control of the entity). Both translate to similar English but mean
  different things — keep the context clear.

- **Gross-up clauses**: When translating contractual gross-up wording, keep the
  English standard formulation. Civil-law contracts often phrase the obligation as
  a duty to "integrate" (integrare) the amount; translate functionally as
  "gross up" rather than "integrate".

- **VAT terminology is a minefield**: input/output VAT, reverse charge, place of
  supply, chargeable event and tax point have specific EU-VAT meanings. Do not
  paraphrase. If the source uses the EU concept (e.g., *operazione imponibile*,
  *exigibilité de la TVA*, *Steuerbarkeit*), use the EU-aligned English term.

- **Cryptocurrency, digital services and Pillar Two**: This area moves quickly.
  Keep the OECD-standard terminology (GloBE rules, IIR, UTPR, QDMTT) where the
  source uses it, and add a translator's note when the local-language acronym
  diverges from the OECD acronym.

- **Quantitative figures**: Tax rates, thresholds and deadlines change frequently.
  When the source cites a specific rate or threshold, reproduce it verbatim and
  do not "update" or "correct" it. If you flag a rate as out of date, do so in a
  translator's note, not in the body of the translation.

- **Currency and number formats**: Italian/German/French use the comma as decimal
  separator and the dot as thousands separator (1.234,56). US and UK English both use
  the reverse (1,234.56). When translating tax figures, convert the format to US/UK
  English style (1,234.56) unless the user specifies otherwise.
