Page 16 - F1 Integrated Workbook STUDENT 2018
P. 16
Chapter 1
3.3 Competent jurisdiction
A taxable person normally pays tax in the country of origin of the
taxable entity. Competent jurisdiction is the tax authority that has the
legal powers to assess and collect the taxes.
3.4 Hypothecation
This means that certain taxes are devoted entirely to certain types of
expenditure, e.g. road tax is used solely for maintaining and improving
the road network.
3.5 Tax Gap
This is the gap between the tax theoretically collectable and the amount
actually collected. The tax authorities will aim to minimise this gap.
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