Definition of income tax

The tax to earnings or income is a tax that is applied on the income received by people, companies or any legal entity as a means of state collection.

Among the various taxes that regulate the normal functioning of the world's companies, there is the very commonly known income or profit tax. This tax has the purpose of concentrating a proportion variable of the income and profits obtained by persons and legal entities subject to the payment of taxes. Normally, according to the type of activity and the total sum of the earnings, the organisms Prosecutors usually calculate a percentage (often variable) of money that the party will have to pay to the government or to the corresponding entity for each certain economic stipend received.

Taxes on earnings are different. For example, it may be a progressive tribute, when the percentage increases according to the increase in the income of the person or institution. The flat tax It is a constant tribute that does not vary according to the conditions of each moment. The

regressive, on the other hand, is that tax that, as the income of the person decreases, it is also reduced, trying to have a impact minor on the economy of the individual.

Although it is a highly publicized tax throughout the world, this does not mean that it has generated less controversy among those classified as liable to receive this tax. For example, many international celebrities and millionaires have to pay exorbitant amounts of income taxes and, For this reason, it is known that sometimes they allocate part of their fortunes to solidarity or charitable works so that the tribute received is less. In turn, individuals and companies around the world can choose not to declare the earnings received and operate outside the legal framework.

Topics in Income Tax