Definition of
tax regime
He tax regime is he set of rules and institutions that govern the tax situation of one person physical or legal. It is, therefore, the set of rights and obligations that arise from the development of a certain economic activity.
From Latin regime, regime is he political and social system that governs a certain region and the set of rules that regulates a thing or an activity. The concept also refers to the historical formation of an era (political regime). Prosecutor, for his part, is what belonging to or relating to the treasury. This last term is linked to the public treasury or public bodies that are dedicated to the collection of taxes and taxes.
- Characteristics of a tax regime
- Its impact on individuals
- Related Topics Tree
Characteristics of a tax regime
The tax regime acts as a guide at the time of the liquidation and payment of taxes. When carrying out an economic activity, people must register in some category to comply with tax obligations. In general, various options are usually presented, that is, various tax regimes that you can submit to depending on the characteristics of your business.
The Tributary legislation of each country determines the conditions of the tax regimes. The amount of money to be disbursed, the maturities, the declarations and everything related to the taxes they depend on the regulations in force in the different territories that, in addition, can change over time.
It is possible to change the tax regime if the economic activity develops differently than expected and the obligations of the framework no longer conform to reality.
It can help you: Tax law
Its impact on individuals
It is important to define the concept of Physical person: It is about any individual who has the capacity to assume obligations and make use of their rights. In this specific context, among its characteristics is the possibility of carrying out activities that are within the framework of the law.
For tax purposes, natural persons are grouped into those that provide services; those that carry out commercial activities; and those who work for an employer and receive a salary.
Saving the characteristics of each country, taxpayers have the obligation to contribute money for public spending through the payment of taxes and this arises, in turn, from the activities they carry out. Among the many possibilities are the provision of services, the leasing of real estate, work under a dependency relationship and commercial activities.
A commercial activity implies the purchase and sale of items in exchange for a profit or profit for the person who performs it; on the other hand, providing a service consists of working on your own, without depending on an employer. The third possibility, work for a salary, is the provision of a service but in an organization whose hierarchy has roles above the employee.
There are certain special cases, which cannot be included in the aforementioned activities, and which also belong to a specific tax regime:
- The additional remuneration (called emoluments) received by the board of directors.
- Income from diplomats from foreign embassies and international organizations.
- The income received by the armed forces, federal entities and municipalities.
- Advances received by members of associations and civil societies.
Contributing to public spending is not only an obligation, but also represents a very important benefit for a country’s economy, since it is one of its main sources of income. The tax regimes to which a natural person can belong are various and depend directly on the type of activity they carry out, as well as their average income.
See also: Organization