A case Study aboutA case Study about

Types of TaxesTypes of Taxes

Prepared & Designed by :Prepared & Designed by :

Yousef Lubbad 120070470Yousef Lubbad 120070470

University of PalestineUniversity of PalestineFaculty of Business Faculty of Business

Administration and Finance Administration and Finance Accounting Department Accounting Department

Types of TaxesTypes of Taxes 1. Direct & Indirect taxes:

• Direct taxes:

Are those taxes where the taxpayer is the one who bears the burden of the tax and cannot pass the burden to another person. Example: Income taxes, Salaries Tax.

• Indirect taxes:

Are those taxes that the taxpayer can pass the burden of the tax to someone else. Example : Sales Tax .

Types of TaxesTypes of Taxes 2. Proportional & Progressive taxes:

• Proportional taxes:

Are those taxes imposed at a fixed rate on the taxable amount regardless of it’s value.

• Progressive taxes:

Are those taxes that their rates escalates with the increase in taxable amount and decreases when the taxable amount decrease.

Types Types of Taxesof Taxes

3. Personal & In-kind taxes:

• Personal taxes:

Are those taxes that consider the taxpayers capability and allows him exemptions (minimum family charge allowance).

• In-kind taxes:

Are those taxes that the taxpayers’ personal circumstances are not considered (No

personal allowance).

4. Qualitative & Unified taxes:

• Qualitative taxes:

This system imposes the tax on each kind of revenue separately.

• Unified taxes:

This system imposes the tax on the consolidation of different revenues of

the taxpayer at unified rates.

Types Types of Taxesof Taxes

• Income taxes:

An income tax is a tax levied on the financial income of people, corporations, or other legal

entities. Various income tax systems exist, with varying degrees of tax incidence. Income

taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a

corporate tax, corporate income tax, or profit tax. Individual income taxes often tax the total

income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the

difference between gross receipts, expenses, and additional write-offs).

Value added Tax (VAT)Value added Tax (VAT): :

Value added taxValue added tax ( (VATVAT), ), oror goods goods and services taxand services tax ( (GSTGST), ), is ais a consumption taxconsumption tax levied onlevied on value value addedadded. . In contrast toIn contrast to sales taxsales tax, , VAT VAT is neutral with respect to the is neutral with respect to the number of passages that there are number of passages that there are between the producer and the final between the producer and the final consumer; where sales tax is levied consumer; where sales tax is levied on total value at each stageon total value at each stage

sales taxsales tax A sales tax is a consumption tax

charged at the point of purchase for certain goods and services. The tax is usually set as a percentage by the government charging the tax. There is usually a list of exemptions. The tax can be included in the price (tax-inclusive) or added at the point of sale (tax-exclusive).

sales taxsales tax Most sales taxes are collected by the seller,

who pays the tax over to the government which charges the tax. The economic burden of the tax usually falls on the purchaser, but in some circumstances may fall on the seller. Sales taxes are commonly charged on sales of goods, but many sales taxes are also charged on sales of services. Ideally, a sales tax is fair, has a high compliance rate, is difficult to avoid, is charged exactly once on any one item, and is simple to calculate and simple to collect.

Taxation in the United Taxation in the United StatesStates

Taxation in the United States is a Taxation in the United States is a complex system which may involve complex system which may involve payment to at least four different levels payment to at least four different levels of government and many methods of of government and many methods of taxation. United States taxation includes taxation. United States taxation includes local government, possibly including one local government, possibly including one or more of municipal, township, district or more of municipal, township, district and county governments. It also includes and county governments. It also includes regional entities such as school and regional entities such as school and utility, and transit districts as well as utility, and transit districts as well as including state and federal government.including state and federal government.

Taxes Types in the United Taxes Types in the United StatesStates

Tax deductions/creditsTax deductions/credits Methods of calculationMethods of calculation Progressive natureProgressive nature Payroll taxesPayroll taxes Social Security taxSocial Security tax Medicare taxMedicare tax Corporate income tax Corporate income tax Transfer taxes Transfer taxes Excise taxes Excise taxes State and local government taxationState and local government taxation

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