Taxation Law Assignment Help from Assignment Help 4 Me Experts

The public sector, to carry out its activity, must receive income to maintain the welfare of the State.

For this, it can raise income through different means such as the sale of public goods, the privatisation of companies, fall into indebtedness in the national financial market, generate income from the public companies, or by rent. However, one way to earn income is through the collection of taxes.



The Public Administration and the State need to finance their accounts through public revenues, which can be of various kinds. The taxes, which are the monetary amount that citizens must pay by law to sustain public spending, are divided in turn into types, special contributions and taxes.

Within taxes, they can be classified between direct taxes and indirect taxes. This article focuses on direct taxes and indirect taxes, which will be specified below.

Tax is understood as the tax that is required of a citizen (without there being a consideration for it). The amount of the same depends on the economic capacity of the individuals, which is estimated through their income, their consumption, their patrimony, etc. The Tax Agency is the body that manages everything related to it.

More specifically, direct taxes are those that are imposed on individuals through their income and assets. They are called direct since they fall directly on the taxpayer and not through economic transactions.

TYPES OF DIRECT TAXES


  1. Tax on the income of individuals (IRPF): The principles of equity and redistribution of wealth through the income of individuals is applicable in this act. It is a progressive tax according to the income of each one to sustain the welfare of citizens and public spending. This takes into account the personal situation of each person to determine the degree that corresponds to and is considered the most important tax.
  2. Tax on the income of non-residents: It is the tax levied on the income of the national territory by people who are non-residents of the country.
  3. Corporate tax: The taxes are collected according to the income earned by companies and legal entities residing in the national territory. According to the accounting result obtained by the company, the amount to be paid annually is determined. Different tax rates are applied in it: 25% as a general rate, 15% for entrepreneurs, 20% for cooperatives, 10% for associations and foundations, 1% for investment companies.
  4. Tax on inheritance and donations: This tax is levied on the increase in patrimony obtained by people through inheritances, legacies or donations.
  5. Tax on equity: The net assets obtained by individuals as of March 31 of each year are taxed. This tax is collected by the autonomous communities and is one of the most controversial taxes for the double taxation that exists with the IRPF. Of the 28 countries that make up the EU, 26 of them do not have this tax.

TYPES OF INDIRECT TAXES



Indirect taxes are the taxes that the people have to pay for the goods and services on a regular basis. The products that are consumed impose an indirect tax on the people. It is considered as the indirect way of government to collect the revenue.

Most of the consumers are not aware of the amount they are paying as an indirect tax.

Here are the types of indirect taxes:

Sales Tax
Whenever we shop for some grocery, there is a fixed amount that we pay at the billing counter; it is always inclusive of the sales tax which is between 4% and 10%. The collected amount is then submitted to the agencies that are local or federal. It is further divided into the various projects and programs. 

Besides it, sales tax is also levied on houses, vehicles etc. Even if the parts used in repairing also include sales tax in their market prices. 

Customs Tax
The import and export of products come under the category of customs tax. The states and the cities that have seaports determine the amount of customs tax. People also pay customs tax whether they are aware of it or not. 

Excise Tax
The taxes paid on raw materials comes under this category. These are levied on the manufacturers as it is the cost they have to pay for doing business. The tax is further passed on the consumers or the customers who purchase the product. 

Gas Tax
The tax paid on the purchase of gasoline for the vehicles is known as a gas tax, another form of gas tax. It also includes federal and state taxes.
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