Types of Taxes. free term paper

Taxes are means that a country uses to get resources and money. Any government chooses its own fiscal system based on many factors and variables, and each fiscal system is composed of many taxes depending on the government needs. So, we can find many taxes in any country, but there are three main type of taxes that are used in almost all fiscal systems: Income Tax, Corporate Tax and VAT (Value Added Tax).

Income tax: Its a tax which is applied on persons’ income: salary or if you have a professional income on which you did not choose to apply corporate income. In most cases, Income Tax is applied on a progressive basis and based on annual income, and always there is an exempted income with 0% tax (usually the minimum wage). The high Income Tax rate varies, according to countries, from 10% to 60%.

Corporate Tax: It is applied on Corporate profit. the tax is applied after deducting all the costs necessary to make that profit. This tax rate is usually a fixed percent (except is some countries where a progressive rate is applied). This rate rages from 10%  to 50% but the most widely used rate is 30% to 35% .

VAT: A tax which is paid by almost all the citizens of a country with the same rate whither they have a high or small income. this tax is included in the price of almost all the product you buy (except in some countries where the necessary products are exempted from VAT). When you buy a computer, the price you are paying is composed of two amounts: the real price of the computer determined by the seller and the VAT which is a percent of the price of the computer. The same thing is for all the other products from bred to your private jet. The rates are based on many things: the type of the product, the use of the product and the fiscal system of the state. It ranges from 5% to 25%.

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