What are the types of taxes?
Direct taxes are applied on a direct or immediate manifestation of economic capacity, such as the possession of a patrimony or the obtaining of an income. This sounds so technical, but it means that this type of tax is applied on possessions or income obtained by a person or company. Its main exponent is the income tax return and it is, in a certain sense, a more personalized type of tax.
Indirect taxes, on the other hand, are levied on the consumption of goods and services, as well as on the transfer of goods and rights in general. This type of tax tends to go more unnoticed, as is the case, for example, with VAT, its greatest exponent.
This tax is also direct because it is levied on the increase in assets following an inheritance or donation. The difference between inheritances and donations is that the former take place after death (inheritance) and the latter between living persons, and are deliveries without consideration.
Wealth Tax can be considered a complement to Personal Income Tax. Here it is not taxed on what you earn, but on what you have. Again, it is a direct tax because it is applied directly on your assets.
On October 26, 2020, the Government introduced new tax incentives aimed at promoting the knowledge economy until the end of 2029. The incentives under the new regime include a reduction in the corporate income tax rate (currently 25%, subject to potential modifications), exemption from the payment of export duties for companies in the service sector, a non-transferable tax credit bonus of up to 70% of employer contributions and tax stability in relation to the benefits of the new regime (available until December 31, 2029).
The Regime requires taxpayers to report any agreement, scheme, plan or other action resulting in a tax advantage or any other type of benefit with respect to any Argentine federal tax (not only income tax) or any other informational regime in force in Argentina in the domestic or international context.
The income tax rate applicable to corporate net taxable income is 25% for tax years beginning on or after January 1, 2021. Towards the end of April, a bill to introduce a scale of tax rates varying from 25% to 35% was being analyzed. Legal entities resident in Argentina are subject to income tax on their Argentine and foreign source income and may request that all similar taxes effectively paid abroad on foreign source income be considered as a tax credit.
Characteristics of taxes
Therefore, taxes are a type of taxation whose main characteristic is that they are not linked to a specific service or activity of the Administration, but are imposed, in an abstract manner, on the basis of a taxable event that tells us the taxpayer’s ability to contribute.
In direct taxes the capacity to contribute is deduced from the personal characteristics of the taxpayer and, therefore, they are applied on the income, wealth or other manifestations of the taxpayer’s wealth and, in them, it is normally the taxpayer himself who settles and pays them directly to the corresponding Tax Administration.
Unlike in the previous case, indirect taxes are not levied on manifestations of the taxpayer’s wealth or ability to pay, but on the use or utilization that the taxpayer makes of his economic resources, since this use is considered an indirect manifestation of his economic capacity. Therefore, they tax consumption.
As a responsible taxpayer, you are surely up to date in the payment of taxes and you comply with each of the tax obligations derived from your activity. But beyond responding to fiscal and tax requirements, do you know how taxes are classified in Mexico? If the answer is “no”, we invite you to find out today.
Regardless of the tax regime under which you pay taxes, and regardless of whether you are an individual or a legal entity, no one is exempt from paying taxes. The type of taxpayer you are, whether you are a salaried employee, a business or any other, will determine the taxes you must pay, and some of them apply to everyone.
In other words, the profile of your economic activities defines your regime and, therefore, the payments and contributions you must make. For the moment, we will focus on knowing which are the existing tax forms.
Federal taxes are the basic taxes applicable throughout the national territory, with which most Mexican taxpayers and foreign residents who exercise an economic activity within the country must comply.