If you worked in any of these countries, you could be due a Tax Refund

Glossary of Tax Terms A-Z

Your A to Z of tax terms





Allowable Deductions:  Any expenditure that can be deducted from gross income to reduce the amount subject to income tax before calculating how much tax is due


Allowable Expenses: Expenses incurred purely for the trade, i.e. incurred ‘wholly and exclusively' for the purposes of the trade. Examples include cost of running vehicles, rent, repairs, and accountancy fees


Assessable Income: The amount of money considered when calculating tax payments


Asset: Something with value that you own outright or have an interest in (such as a leasehold)


From Irish tax perspective, is not clearly defined in tax legislation but in general, the asset must be:


- Apparatus used in carrying on a business

- Kept for permanent use in the business

- Functional in the context of a business, not part of the setting in which the business is carried on and not part of the building


Audit: Official inspection of your organisation’s accounts

Australian Business Number (ABN): A unique 11 digit number that identifies your business to the Australian Government


Australian Taxation Office (ATO): This is the Australian Government’s statutory agency for revenue collection. The ATO collects income tax, goods and services tax, and other federal taxes


AVCs: Additional Voluntary Contributions that can be made to your private pension to build up an additional retirement fund





Beneficiary: The individual who receives benefits from certain acts. For example, the beneficiary could be a person entitled to benefits from a trust property


Benefit-in-Kind: Benefits-in-Kind are benefits employees or directors have that are not included in their salaries. They include things like company cars, private medical insurance or free accommodation

Most benefits from employment that are provided in addition to your salary are subject to income tax.

Generally, there are two types of benefits that an employee may get in addition to a salary:


  • Benefits-in-kind These are benefits that an employee receives that cannot be converted into cash but have a cash value. Examples include provision of a company car, loans given at a special rate or provision of accommodation


  • Benefits (other than benefits-in-kind). Examples include vouchers, holidays, payment of an employee's bills and prizes.




Capital Gain: The profit from the sale of a capital asset. Example: Asset such as land, buildings and shares


Capital Gains Tax (CGT): A type of tax levied on the profit from the disposal of an asset. Tax on gains that arise on the sale of capital assets, items such as land, buildings and shares


Canada Revenue Agency (CRA): Canadian federal agency administering tax laws for the Government of Canada and for most provinces and territories


Corporate Income Tax: A type of tax levied on the income of corporations, usually imposed at the national level


Creditor: Person or company to whom money is owed





Deduction (tax): A reduction in tax obligation from the taxpayer’s gross income. Deductions are removed from taxable income and thus lower tax liability


Dependant: Individual who relies on another; for example a child or disabled family member 

Dividends: Sum of money regularly paid by a company to shareholders from its profits


DIRT: Deposit Interest Retention Tax deducted at source from interest paid on deposits of Irish residents (e.g. from banks, credit unions, etc.)

Domicile: Permanent home country of a person or the country they live in and have substantial ties with

Double Taxation Treaty: An agreement with two or more countries to reduce how much tax a worker or company must pay, so they don’t need to pay tax twice on the same income

Duty-Free Zone: A zone where merchandise can be brought in without import duties





Earned Income: Income derived from paid work 

Effective Tax Rate: Used in the US to describe the average rate at which an individual is taxed on earned income


Emergency Tax: The tax an individual pays when it’s not clear what tax band they should be assigned to. To avoid this in Ireland, you should give your employer your PPS, p45 or tax credit certificate


Excise Tax/Duty: A tax on the sale of particular goods 

Exempt Income: Used in the US to describe types of income not subject to federal income tax





Final Cumulative Payslip: In the US this is a statement you receive with your final paycheck detailing your total earnings and tax paid


Fixed Assets: Assets purchased for long-term use and not for immediate resale (for example, land, equipment)


Flat Tax: A tax system with a constant marginal rate


Form 8843: Statement for Exempt Individuals and Individuals with a Medical Condition. An information statement for the US government used by non-resident aliens


Form P50: A form for the first time you claim for a repayment of income tax and/or USC during unemployment


Form 12: In Ireland this is for PAYE employees to declare additional net income up to €3,174, for non-residents, or claiming other credits that can’t be claimed through the online PAYE system


Form P2: Employee Copy of Tax Credits, Standard Rate Cut-Off Point, Universal Social Charge and Local Property Tax


Form P2c: Employers Copy of Employee’s Certificate of Tax Credits, Standard Rate Cut-Off Point, Universal Social Charge and Local Property Tax






Gross Income: The amount of income paid to an employee before any deductions are made


Gross Pay: An employee’s pay before any deductions such as tax are made




Home Carer Tax Credit: A Home Carer tax credit is given to married couples or civil partners where one individual cares for a dependent. The credit is given in the case of those who are jointly assessed for tax


Health Expenses: The amount spent on a diagnosis or treatment of medical problems. You may be entitled to a refund of some of the amount you paid for qualifying medical expenses 

Help-To-Buy Incentive: A scheme introduced in Budget 2017 for first-time-buyers purchasing newly built homes. This is in the form of a refund of income tax and Deposit Interest Retention Tax paid over the previous 4 years

Home Renovation Incentive: The HRI scheme enables homeowners or landlords claim tax relief on renovating or repairing their main home or rental property

HM Revenue and Customs (HMRC): UK Government Department responsible for collecting taxes





Income Tax: A tax levied directly on income


Inland Revenue Department (IRD): New Zealand Government Department charged with the collection of taxes and disbursing payments for social support programmes

Internal Revenue Service (IRS): US Government agency responsible for tax collection

Individual Taxpayer Identification Number (ITIN): A tax processing number issued by the IRS in the US. You can apply for an ITIN here if you want to work in the US or file a US tax return

Inheritance Tax: The beneficiary to an inheritance must pay this tax. If you are a surviving spouse or civil partner receiving inheritance from your deceased spouse however, the inheritance is exempt and not liable to the tax





Joint Assessment: Basis for assessment of a couple in a marriage or civil partnership. In Ireland this is usually the most favourable basis of tax assessment





Living City Initiative: A scheme of tax incentives to encourage the regeneration of historic buildings in ‘special regeneration areas’ in Ireland


Local Property Tax (LPT): A self-assessed tax paid annually by homeowners on the market value of residential properties




Medicare Levy: This is an Australian levy that gives residents access to healthcare and is partly funded by taxpayers. If your income is below a certain threshold you may not need to pay the levy. Some people are entitled to a refund of this


Med 1: Form for claiming health expenses tax relief


Med 2: Form for claiming dental expenses tax relief


1040-NR: This is a form used in the US for a non-resident alien income tax return





Net Income: The total income after any deductions have been made  

National Insurance Contributions: National Insurance is a system in the UK where workers and employers pay contributions towards the cost of state benefits

Non-Resident Alien: Any person who is not a US citizen or lawful permanent resident

Notional Pay: The value of any non-cash benefit or perquisite





PAY As You Earn (PAYE): A system for paying income tax and other contributions


PAYE Employee: Employee under the Pay As You Earn tax system where the employer calculates and deducts the amount of tax due

Parking Levy: In Ireland this is a charge on employees for using car parking provided by the employer in designated urban areas 


Pay Related Social Insurance (PRSI): Most employees in Ireland over 16 make social insurance contributions and the amount you pay depends on your earnings and type of work

Payslip: A statement given to an employee detailing income earned and deductions such as tax 


Penalties: A tax penalty is sometimes imposed for an underpayment of tax or late filing


Personal Public Service Number (PPSN): A unique number given to each individual to access social welfare, benefits and information in Ireland

P21 Balancing Statement: A final statement of your income tax liability for a tax year  

Personal Tax Credit: In Ireland a personal tax credit is due to every individual resident in the State. The amount depends on your personal circumstances; e.g. whether you are married, single, etc.


P45: In the UK and Ireland this is a certificate given to employees at the end of the employment with details of gross pay and tax paid for the year


P60: This is a statement issued to employees at the end of a tax year detailing income and tax paid. It is important you keep this as it could help you apply for a tax refund


Personal Allowances: A personal allowance is the threshold above which income tax is levied in the UK tax system

Progressive Tax: A tax where the rate increases as the taxable amount increases






Refund (of tax): A refund or repayment of tax given to the taxpayer if the tax they owe is less than the amount of tax withheld or estimated tax they paid


Rent Tax Credit: The rent tax credit in Ireland applies for the years 2011 onwards to individuals who were renting on 7 December 2010


Resident Alien: You are a resident alien for tax purposes in the US if you meet either the green card test or substantial presence test for the calendar year

Revenue: The office of the Revenue Commissioners is the Irish state body responsible for collecting taxes and duties


ROS – Revenue On-Line System: Revenue’s online system for enquiries and to view your tax position





Self-Assessment: Calculation of one’s own tax liability. For example in Ireland, if you’re self-employed you must typically file a tax return each year by October 31


Separate Taxation: A method of taxing a married couple or couple in a civil partnership as separate individuals for the purposes of calculating tax

Social Insurance Number (SIN): A nine-digit social insurance number required to work in Canada. You can apply for one here

Stamp Duty: A tax on the legal recognition of certain written documents  

Social Security Number (SSN): A nine-digit number issued to US citizens, permanent residents, and temporary working residents  


Sole Trader: An individual in Ireland operating a business. The sole trader can have employees to assist with running the business but owns the business and takes all the risks and rewards


Special Assignee Relief Programme (SARP): This programme was introduced to reduce the cost to foreign employers of assigning certain key individuals from abroad to take up roles in Ireland. The employee’s income must exceed €75,000 per tax year


State Benefits: Benefits given by the government to assist people in certain circumstances, such as the unemployed, disabled or ill


Statutory Residence Test: This is a test to determine UK residence status  


Standard Rate Cut-Off Point: The amount that you can earn before you start to pay the higher rate of tax is known as your standard rate cut-off point In Ireland you pay tax at the standard rate of tax up to your standard rate cut-off point. Anything over your standard rate cut-off point is taxed at the higher rate of 40%.  

Start Your Own Business Relief: Relief from income tax for long-term unemployed individuals in Ireland to start a business. Under the scheme, qualified applicants get an exemption from income tax up to a maximum of 40,000 per year

Substantial Presence Test: You are considered a resident for tax purposes in the US if you meet the substantial presence test  

Social Security Number (SSN): In the US, a social security number is a 9 digit number issued to US citizens   

Superannuation: Australian retirement fund scheme. You can get a refund of this is you leave Australia permanently





Tax: Tax is a compulsory contribution levied by the government on items such as employee’s income, business profits, and the cost of goods and services


Tax Agent:  A tax agent or tax preparer prepares and files the returns of income on behalf of taxpayers


Tax Authorities: The authority responsible for tax collection


Taxation at Source: When tax is taken out of your income before it’s paid, e.g. by your employer  

Tax Code: A code used by the tax authorities to calculate tax to be deducted in the PAYE system  

Tax Credits: Sums that can be offset against a tax liability

Tax Credit Certificate:  In Ireland a tax credit certificate shows your total tax credits and rate band

Tax Evasion: An illegal non-payment or underpayment of tax  

Taxable Income: The amount of income used to calculate an individual or company’s income tax  

Tax File Number (TFN): A unique identifier issued by the Australian taxation Office (ATO).You will need one if you apply for a job in Australia. You can apply for a TFN here


Tax Pack: Information to assist taxpayers in completing their tax return


Taxpayer: An individual who pays taxes  

Tax Relief: Reduces the amount of income tax due on earned income


Tax Return: A statement from a taxpayer to the tax authorities with details of income earned and personal circumstances  

Tax-Free Threshold: If you’re an Australian resident for tax purposes, the first €18,200 of your yearly income is not taxed. This is the tax-free threshold  

Tax Threshold: The level of income at which an individual starts paying tax or a higher rate of tax

T4: Statement of Remuneration paid in Canada. If you are a salaried employee in Canada, you’ll get a T4 from your employer detailing what you have been paid and any contributions deducted from your pay throughout the year




Universal Social Charge (USC): A tax on income that replaced the income and health levies in Ireland  




Value Added Tax (VAT): Tax on a product added at a production stage or at final sale  





Withholding Tax: Tax deducted at source, for example by an employer  


Worldwide Income: The aggregation of a taxpayer's domestic and foreign income. Worldwide income is income earned anywhere in the world and is used to determine taxable income

Some countries tax their non-resident citizens on their worldwide income but countries with a residential taxation system typically allow deductions or credits for residents who pay in other countries on their foreign income


W2 Form: In the US this form reports your annual wages and amount of taxes withheld  

About The Author

Ciara Kennedy - Digital Content Writer @ Taxback.com

Ciara is our Digital Content Writer at Taxback.com. Since graduating in Journalism and Visual media, Ciara has worked in online marketing in Ireland and Australia and loves writing in all its forms.

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