Archives: Terms

Definition of Tax Return A tax return is a form or forms filed with a tax authority that report income, expenses, and other pertinent tax information. In most countries, tax returns are filed annually with the federal government or local tax authority and are used to determine if a taxpayer […]

Definition of Tax Refund A tax refund is the return of excess taxes paid to the government by a taxpayer. When an individual’s tax payments, via payroll deductions or estimations, exceed their actual tax liability, the government compensates the difference in the form of a refund. Tax refunds generally occur […]

Definition of Tax Reform Act The Tax Reform Act refers to legislative measures aimed at improving the tax system of a country by simplifying tax codes, eliminating loopholes, broadening the tax base, and often altering tax rates. These reforms are designed to make the tax system more efficient, equitable, and […]

Definition of Tax Holiday A tax holiday is a temporary reduction or elimination of tax designed to encourage economic activity and investment. Governments often use tax holidays as part of their fiscal policies to stimulate business activities during tough economic times, attract foreign investment, enhance job creation, or support specific […]

“`html Definition of Tax Haven A tax haven is a country or territory where certain taxes are levied at a low rate or not at all. It offers individuals and businesses favorable tax conditions, allowing them to reduce their tax liabilities through efficient tax planning. This often attracts foreign investments […]

Definition of Tax Expenditure Tax expenditure refers to revenue losses attributable to provisions of the federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability. In simpler terms, tax […]

Definition of Tax Exempt Special Savings Account A Tax Exempt Special Savings Account (TESSA) is a financial savings product that allows depositors to earn interest without having to pay taxes on those earnings. Originating in the UK, TESSAs were introduced in 1991 and offered tax-free interest on savings for a […]

Definition of Tax Burden Tax burden refers to the economic impact of a tax on individuals or firms. It represents the share of income or wealth that must be paid in taxes, reducing the disposable income available for consumption and savings. The tax burden can be analyzed in terms of […]

Definition of Tax Avoidance Tax avoidance refers to the use of legal methods to minimize an individual’s or a corporation’s tax liability. This practice involves taking advantage of legal deductions, credits, loopholes, and other provisions in tax laws to reduce the amount of tax owed. Unlike tax evasion, which involves […]

Definition of Tax Assessment Tax assessment is the process by which a taxing authority, such as the government or local tax agency, determines the value of a property or an individual’s income to compute the amount of tax owed. This procedure involves evaluating various financial activities, assets, and income sources […]