Glossary: Beginner's Guide to Taxation International Edition
🅰️ A–C Adjusted Gross Income (AGI): Income after allowable deductions. Example: You earn ₦5,000,000 and deduct ₦500,000 in pension contributions—your AGI is ₦4,500,000. Advance Tax: Tax paid before the financial year ends, based on estimated income. Example: A freelance designer in Lagos pays advance tax quarterly to avoid penalties. Arm’s Length Principle: Related companies must price transactions like they’re unrelated. Example: A Nigerian company sells goods to its UK branch at market price—not a discounted rate. Audit Trail: A record of financial transactions for tracking and verification. Example: Your business keeps receipts, invoices, and bank statements as an audit trail. Base Erosion and Profit Shifting (BEPS): Moving profits to low-tax countries to avoid tax. Example: A multinational routes profits to a tax haven like Bermuda to reduce tax bills. Capital Allowance:...