English Language & Usage Stack Exchange is a question and answer site for linguists, etymologists, and serious English language enthusiasts. It only takes a minute to sign up.
Sign up to join this community
I may need someone knowing about accounting to answer this for me:
On the contract,the show fee I should pay to a artist is$10,000. 20%($2,000) goes as withholding tax and 80% ($8,000)goes as the exact transfer amount received .
under this circumstance,the note I put behind the show fee($10,000) should be "tax-inclusive" or "tax-exclusive"?
Thanks again!
Tax rates can be presented differently due to differing definitions of tax base, which can make comparisons between tax systems confusing.
In a tax-exclusive base, the tax rate is $2000/$8000 = 25%, whilst in tax-inclusive base, the rate is $2000/$10000 = 20%.
Therefore, the $10000 are tax-inclusive (or inclusive of all taxes).
The $8000 are tax-exclusive, but according to the official base of 20%, such wording should be avoided in the order or invoice.
I will use Google's dictionary here.
gross
2. (of income, profit, or interest) without deduction of
tax or other contributions; total.
Thus the $10,000 fee before tax is the gross fee.
Now Merriam-Webster:
net
1. free from all charges or deductions: as
a. remaining after the deduction of all charges, outlay,
or loss <net earnings> <net worth> — compare gross
Thus after the deduction of taxes we are left with $8,000, the net fee.
If you're unsure, then the other party/ies may also be unsure. Why not just spell out exactly what you mean? There's no benefit to being pseudo-legalistic when plain English can do the job. The fee is $10000, 20% of which will be withheld for taxes, leaving a net payment of $8000.
