Tax Glossary

Tax Glossary

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There are currently 11 names in this directory beginning with the letter W.
Wage Tax
Tax levied at source as a withholding on wages; taxes thus withheld are usually offset against final income tax liability (if any).

Wash Sale
A stock transaction in which the person sells or trades stock or securities at a loss and, within 30 days before or after the sale, acquires substantially identical stock or securities, either directly or through an option.

Wear and Tear
Decline in value through the ordinary use of an asset. Income tax systems usually allow deductions in calculating the profits of a business using buildings, plant and machinery which are subject to wear and tear during the business.

White Paper
Government document announcing government policy and practice on a specific issue or issues.

A legal document that serves as a key vehicle of transfer at death.

Winding Up
The process of liquidating a corporation.

When income or goods are withdrawn from a business by the entrepreneur to his private household (without a consideration), the income or the value of such goods normally constitutes a taxable event in the hands of the recipient for income tax purposes. Similarly, a withdrawal of goods or services for private use constitutes a taxable transaction for VAT purposes in most countries using such a system.

Withholding Tax
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.

Withholding Tax Credit
Various kinds of income (such as dividends, interest, royalties) are taxed at source by requiring the payer to deduct tax and account for it to the tax authorities (abroad). The taxpayer recipient is entitled to credit the tax withheld at source against his final tax liabilities determined by (domestic) tax law of the country in which he is resident.

Working Capital
Funds invested in a company's cash, accounts receivable, inventory, and other current assets (gross working capital). The term usually refers to net working capital, that is, current asset minus current liabilities.

World Wide Income
Criterion for the income tax liability of a resident company or individual of a certain country. In many countries a resident company or individual is subject to corporate/individual income tax on its worldwide income, subject to double taxation relief.