The tax credit is a resource available in many countries to minimize what is paid in taxes.
The first thing we are going to do before entering fully into the explanation of the meaning of the term tax credit is to determine its etymological origin. In this case it must be stated that the two words that make it up come from Latin.
Thus, we find the fact that credit is a word that emanates from the Latin verb credere that can be established as being synonymous with “believe.” On the other hand, the second part of said term, fiscal, comes from the Latin noun fiscus which can be translated as “basket”.
What is the tax credit
The concept of tax credit has several uses, generally linked to different countries. It can refer, for example, to the possibility that a company has of reducing the taxes it pays in its country through those it paid to a foreign government for some international trade operation.
On the other hand, the tax credit is the amount that a company has paid in taxes when acquiring a product or input and that can deduct it from the State at the time of resale. For example: A business buys a DVD player and pays $125 for it, of which $25 corresponds to taxes. The next day, the merchant sells that equipment to an end consumer for $250 (50 corresponding to taxes). When paying tribute to the State, the merchant will pay 25 dollars in taxes for these transactions, since the remaining 25 can be computed with a tax credit for his original purchase.
In other words, it can be stated that the tax credit is an amount of money in favor of the taxpayer . When determining the tax obligation, the taxpayer can deduct it from the tax debit (his debt) to calculate the amount that must be paid to the State.
The money that a taxpayer has in his favor before the treasury is called a tax credit.
How to determine
In addition to all of the above, it is important that we know that when determining the amount of a tax credit it is essential to take into account a series of parameters, specifically data and figures. Thus, we can indicate that this is achieved after establishing the amounts of the authorized deductions, the income received, the percentage of the corresponding rate and the amount of the result.
The government can implement different programs for the use of the tax credit (which, in all cases, will be an amount of money in favor of the taxpayer, which can be a company or an individual). There are plans where the taxpayer can use tax credit to pay for training classes; In this way, the money returns to the State, but the taxpayer receives more services.
Training Tax Credit Program
In the case of Argentina, we have to make it clear that there is what is known as the Training Tax Credit Program . Specifically, it is defined as an instrument that is granted to the different companies and companies of the aforementioned country so that they can obtain reimbursements based on the investments they carry out in regards to the training of their workers.
Specifically, said training can be carried out both through the company's own courses and through activities organized by public institutions.