What is Income Tax? – Definition, Pay, Calculation, and More
The Income Tax levied on all income, income, profit or benefit, obtained by individuals, companies, and undivided estates in a given fiscal period.
Legal Basis, Title II Law 11-92 d / f 05/16/1992 and its amendments.
It is a tax applying to acquired income, except inheritances and donations.
It is a direct tax, as it directly taxes the sources of wealth. Indirect ones are those that tax consumption (such as VAT and IEPS ).
It is a direct tax burden that is applying to the income obtained that increases the taxpayer’s patrimony.
So that individuals and companies (companies) are obliged to pay this tax.
According to the Income Tax Law (LISR), payment is require to people in Mexico.
They reside abroad with an establishment in the country.
Residents who receive income from sources of wealth in Mexico
Also read: What is Innovation? – Definition, Characteristics, Types, and More
Who Pays this Income Tax?
Any natural or legal person is residing in the Dominican Republic.
And the undivided successions of originators domiciled in the country will pay the tax on their income from Dominican sources and sources outside.
Republic investments and financial gains.
How to Calculate Income Tax?
Even though this tax is annual, a provisional payment must be complete each month to the Tax Administration Service ( SAT ).
- You have to locate the monthly salary or your total income within the table within the heading “Lower limit” and ” Upper limit. “
Then you have to subtract the “Lower limit” from your total income; This result is knowing as the base.
- Within the table, you have to locate the percentage corresponding to your monthly salary.
Once found, the base is subtracting according to the rate corresponding to your income range.
- The result obtained must be added to the “Fixed Fee.”
The result of this operation is the total that will be subtract from your check per month.
Example: $ 10,000 ——- Monthly Income – 8, 629.21 —– Lower limit ______________________________ $ 1,370.79 —— Base – 16.00 ——— Rate ______________________________ $ 219.2 ——– Result + 692 ——— Fixed fee __________________________ $ 911.2 ———- Total ISR payable
How much is the Income Tax?
For all citizens of Germany, there is a critical coverage system.
Below this amount, your income will not be considered taxable.
As of 2020, the amount is 9,408 euros.
For married people or with a civil partner, they are 18 816 euros.
To the extent that the income is above the amounts above, it will be taxable for income tax purposes.
Tax rates are between 14 and 42 percent.
The higher the taxable income, the higher the tax rate.
The maximum tax rate of 42 percent is paid only by unmarried or married people who have a taxable income of more than 250,731 euros per year.
For married people or with a partner, the maximum rate will be applicable from an income of 501,462 euros.
What is the Statement of Income Tax?
The income statement
Once the calendar year is over, you can request verification of an eventual overpayment of income tax.
For this, you must deliver your statement of income to the tax agency.
By virtue of the data you provide about the income you have received and the charges you have borne, the tax authority will be able to verify whether you are entitled to a refund.
In general, it is worth filling out the tax return form.
According to data from the Federal Statistical Office, nine out of ten taxpayers had the return returned.
The average reimbursement was almost 900 euros.
What are the Types of Income Tax?
1) Salaries received for subordinate service
2) Professional activities
3) Leasing or use of a real estate
4) Interest earned
5) Awards obtained
6) Dividends and profits distributed by legal entities
7) Disposal of assets
What is the Method of Regulation of Income Tax?
The method established in the Regulations of the Income Tax Law has five steps.
We will explain below using the same example of the person with a monthly salary of 6 thousand pesos and 3 thousand.
Previously, it is necessary to calculate the bonus not exempt from ISR payment, for which the exempt dividend must be subtracting from the prize.
That is 3 thousand minus 2 thousand 534.7 pesos.
The result is 465.3 pesos.
- First, you have to divide the part of the Christmas bonus that ISR (465.3 pesos) does pay between the 365 days of the year, which gives us a total of 1.27 pesos.
- Later we multiply it by 30.4, with which we obtain 38.75 pesos.
- Then you have to add the result of the first step to the ordinary monthly salary.
The result is 6 thousand 38.75 pesos.
4. At this amount, we must calculate the ISR using the table of the previous method.
The resulting tax to pay is 116.49 pesos.
5. From the figure resulting from the previous step (116.49), we must subtract the tax corresponding to the expected salary (112.27 pesos).
The result is 4.22 pesos.
6. The result obtained in the previous step must be divided by that got in the first step.
That is 4.22 / 38.75.
We get a rate of 10.89%.
Also read: What is Internet? – Definition, Characteristics, Operation, and More
- READ MORE:- techhdevelope
What are the Basic Things which People should know about the Concept of the Number Line?
Number Line – The number line is the visual representation of the numbers on the straight line and this particular…
How Web Design and Development Affects Your Customer’s Buying Decision
Maintaining the beauty and choosing your site’s interface features significantly affects your business. If your website is for an online…