What I Can Teach You About Businesses

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  • July 12, 2018
  • Compliance to the Personal Tax Systems

    An individual or an entity is required to pay tax depending on the amount of income or even profits they receive and this type of tax is commonly referred to as the personal tax. The amount of personal tax one is required to pay is determined by the rates imposed in the given state or country on the incomes and profits. Personal tax usually increases as the incomes and profits of the individual increases hence is usually referred to as progressive nature. The income used for calculation of personal tax for resident individuals in a given state or country is usually their total income less any activity that generates tax and other deductions imposed. The net gain obtained after sale of any property such as goods for sale that have been held is taken as part f the income that personal tax is imposed. For non-resident individuals in the country or state, personal tax is only imposed of income sources of certain activities carried within the region.

    Imposition of personal tax is usually based on certain principles such as the taxpayers and rates, residents and non-residents, defining income, deductions allowed, business profits among others. Personal tax is only charged on individuals and entities that have not been legally identified as corporations and the rates depends on the slab where the income falls. Money received from service compensation, sale of property and goods, dividends, interest, royalties, rents, pensions, annuities among others are some of the income sources where personal tax is charged. There are those incomes that one is nor required to pat the personal income such as the superannuation income and national payment plans after retirement.

    Depending on how one receives income, it is important to make payments of personal tax on regular basis. The body that collects tax provides an online platform where individuals and entities can make payments for their personal tax. Payment on time of the personal tax is usually done to avoid penalties one is likely to be slapped with by the regulating body. In case there are penalties and interest that one is required to pay to the government, it is important to pay them as soon as possible to avoid more penalties and interests.

    One enjoys various benefits for complying with the personal tax systems other than just not being imposed with penalties and interests. An individual who complies with the personal tax systems can easily obtain loans from financial institutions. Another benefit is that it is easy to obtain visas to travel to countries that require one to provide a tax compliance certificate for several years back to show their credibility. It is also a requirement in all states to have the tax compliance certificates so that they can be successful in case one is applying for a tender in a government institution.

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