Cross-border tax terms — T

These entries describe how a term works rather than what it is worth in a given year. That is deliberate — figures move, and a figure remembered from a definition is the kind that ends up on a return unchecked.

Most of these terms exist because two tax systems describe the same thing differently, or because one system has a concept the other does not. That is where cross-border files go wrong quietly: a position that is obviously right at home has no counterpart abroad, and the mismatch — rather than the rate — becomes the exposure. Each term page therefore says what the word means, why it bites, and which of our pages it actually changes.

Recognising a term like this in your own paperwork is the useful skill. Working out which side of it you fall on is a short call. Every page here carries the name of the person who reviewed it and the date they did.

• Tax residency — The connection that gives a country the right to tax your worldwide income.
• Tie-breaker rule — The ordered treaty tests that resolve dual residence: permanent home, then centre of vital interests, then habitual abode, then nationality, with agreement between the authorities as the last step.
• Tax home — The main place of business or employment, used to test whether someone is genuinely based abroad.
• Tax treaty — A bilateral agreement allocating taxing rights between two countries, capping withholding rates, resolving dual residence and providing for relief from double taxation.
• Treaty override — Domestic legislation that displaces a treaty provision.
• Treaty shopping — Routing income through a third country to access a treaty rate.
• TDS — Tax deducted at source — the Indian withholding mechanism.
• TCS — Tax collected at source, applied in India to specified transactions including outward remittances.
• T1135 — Canada's foreign income verification statement, reporting specified foreign property.
• T1134 — Canada's information return for foreign affiliates, with financial and ownership detail on each one.
• Taxable surplus — A pool of foreign affiliate earnings whose distribution to Canada attracts Canadian tax with a deduction for underlying foreign tax.
• Tax residency certificate — The certificate from a treaty partner's authority that India requires before granting treaty relief, for the right period and in the right name.
• T106 — Canada's information return of non-arm's-length transactions with non-residents, and the first document a transfer-pricing auditor reads.
• Taxable Canadian property — The class of property whose disposition by a non-resident is taxable in Canada, including Canadian real property and certain shares.
• Transfer pricing — The pricing of transactions between related parties across borders, tested against what independent parties dealing at arm's length would have agreed.
• TNMM — The transactional net margin method, testing an operating margin rather than a gross one — which is why it survives accounting differences that defeat gross-margin methods.
• Tested party — The entity whose margin is measured in a transfer-pricing analysis, normally the less complex of the two parties to the transaction.
• Thin capitalisation — Rules capping the deductible interest of a company funded disproportionately by related-party debt, tested by capital structure rather than by rate.
• Terminal return — The final income tax return of a deceased person, covering income to the date of death and the deemed dispositions arising on it.
• Transfer certificate — The document that releases US-situs assets held by a custodian after a non-resident's death — the practical bottleneck in a cross-border estate.
• Taxpayer relief — The Canadian discretion to cancel or waive penalties and interest — never the tax — for circumstances beyond the taxpayer's control, within a look-back limit.
• Tax equalisation — A policy under which the employer bears the actual host and home tax and deducts a hypothetical home tax from the employee.
• Tax protection — A policy under which the employee is reimbursed only if the assignment leaves them worse off, keeping any windfall.
• Totalization agreement — A social security agreement assigning coverage to one country and allowing contribution periods to be aggregated for benefits.
• Trailing liability — A tax obligation that arises in a country after the employee has left it, typically on deferred compensation or equity.
• Tax risk register — A ranked record of a group's exposures with quantum, mitigation and evidence, so a board can approve a position rather than discover one.
• Tie-breaker rules — The ordered treaty tests that resolve dual residence.
• Thin capitalization — Rules capping the deductible interest of a company funded disproportionately by related-party debt, tested by capital structure rather than by interest rate.

What the T entries have in common

28 terms begin with T. Follow the entry itself for the mechanism, the filings it decides, and the fixed fee attached to that work. Three to start with: Tax residency, Tie-breaker rule and Tax home.

Nearby letters

S — 39 terms · U — 4 terms. The full A–Z lists all 297 terms in one place.

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