We explain what the tax credit is, what its main objectives are and the accessories that this type of balance has.
What is the tax credit?
It is known as a tax credit to the balance that a natural or legal person has in your favor when declaring your taxes, and that generally represents a deductible amount from your final payment, due to certain conditions of your economy. In other words, it is a positive balance in favor of the taxpayer, which must be deducted when paying taxes.
In this sense, the tax credit is contrary to the tax debit, which represents the debt of the person with the Condition, and the regulations that define or calculate each of these amounts will always be included in the legal and legal framework by which each country chooses to be guided (that is, the laws).
The tax credit has, in principle, the objective to prevent assessed business transactions from leading a person to pay twice tax, that is, to pay double tax. For example, if a merchandise reseller pays taxes at the time of purchase, that amount paid should be deducted from the tax that he must pay when he sells the same merchandise, since he has already paid the treasury for it.
On the other hand, the tax credit can be used by the State to offer services to citizens instead of reimbursing the excess money, thus returning it in the form of prepaid services.
Or you can use that credit as a financial tool for different economic purposes, thus generating more capital. In any case, the management of the tax credit is part of the fiscal strategies of a given nation, and will be set by the ministry of finance or the agency in charge of it.
Tax Credit Accessories
The tax credit always includes the so-called "accessories", which are nothing more than items or concepts that allow determining the figure in favor of the taxpayer. Examples of this are:
- Surcharges. Interest generated by debts to the physical, calculated based on variable rates, according to the fiscal regulations of the country. Extensions are often granted for cancellation, and in that case they are not taken into account.
- Fines Violations due to the evasion of tax laws or other conditions that increase the amount to be paid, or that in some cases, if paid on time, are deducted from the total amount of the tax (as a form of incentive). Everything, again, in accordance with the legislation country prosecutor.
- Execution expenses. Considered as expenses administrative, originate when debts with the State are not settled in the weather established in advance, according to a variable formula of interest or surcharges, which are finally added to the tax payment of the person.
- Updates. Due to economic changes, inflation or certain political and economic conditions, the amounts may require updates in the form of extra fees or additional figures.
- Deductibles. On the contrary, these factors are taken into account when calculating the payment of the tax, to subtract from the total amount some percentage based on the conditions of life of the person or their economic activity. This is to guarantee that those who have the most pay more and those who have the least pay less, but always respecting a series of fiscal and proportionality rules.