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Liquidating distribution taxability

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The decisive criterion is whether the activity of the fixed place of business in itself forms an essential and significant part of the activity of the enterprise as a whole.AUXILIARY COMPANY -- Company which is part of a group of companies and which supplies auxiliary services to group companies.

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ARBITRATION -- Term used for the determination of a dispute by the judgment of one or more persons, called arbitrators, who are chosen by the parties and who normally do not belong to a normal court of competent jurisdiction ARM'S LENGTH PRINCIPLE -- The international standard which states that, where conditions between related enterprises are different from those between independent enterprises, profits which have accrued by reason of those conditions may be included in the profits of that enterprise and taxed accordingly ARM'S LENGTH RANGE -- A term used in transfer pricing to describe a range of values that can be defined for purpose of selecting an appropriate arm's length price from comparable transactions.AVOIDANCE -- 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. evasion -B- BACK-TO-BACK LOAN -- Method of borrowing between related parties where a loan is channelled through an independent third-party intermediary. Bad debts may usually be treated as losses and written off against a reserve for such debts.BALANCE SHEET -- Statement of the financial position of a business as of a particular date.AUDIT -- 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.AUXILIARY ACTIVITIES -- A fixed place of business through which an enterprise exercises solely an activity which has, for the enterprise, a preparatory or auxiliary character, is, under tax treaties generally, deemed not to be a permanent establishment.ADMINISTRATIVE OFFICE -- Office frequently located in a country other than that of the headquarters office, the parent company or country of operation.

ADVANCE PRICING ARRANGEMENT (APA) -- An arrangement that determines, in advance of controlled transactions, an appropriate set of criteria (e.g.

method, comparables and appropriate adjustments thereto, critical assumptions as to future events) for the determination of the transfer pricing for those transactions over a fixed period of time.

An advance pricing arrangement may be unilateral involving one tax administration and a taxpayer or multilateral involving the agreement of two or more tax administrations.

The statement will show the business's assets in one column and its liabilities and owner's equity in another column.

BALANCING PAYMENT -- A payment, normally from one or more participants to another, to adjust participants’ proportionate shares of contributions, that increases the value of the contributions of the payer and decreases the value of the contributions of the payee by the amount of the payment, in the context of CCA (Cost Contribution Arrangements). BASE COMPANY -- Company situated in a low-tax or non-tax country (i.e.

ALIEN, TAX TREATMENT OF -- A person who is not a citizen of the country in which he or she lives.