What is the tax occurrence?

In certain circumstances, it is possible to transfer the costs of another group of tax; The incidence of taxes determines what the group actually pays tax. This process monitors the tax on its origin through all economic strata to the final payer. In many cases, the person is a few steps removed from a real tax that carries the largest burden.

Although it may seem as if a person paying tax would be carried by the tax occurrence, it is not always the case. Some taxes are collected against a certain group, but rather than paying these taxes pass them to another group. A person who pays the actual tax, the one who fills in forms, pays the nominal tax occurrence. This form of tax occurrence is rarely the last step in the process.

Generally, one gives his expenses to others whenever possible. If the tax is collected on the manufacturer, it gives additional costs by increasing the price. If a company that uses goods for a finished product then has to pay more, IT increases the price. The goods then go to the retailer who is foundEdna pays more for a stored product. The seller either accepts an increased price or hand over it to its customers.

Each of these steps is a separate link in the string. While the initial person had a nominal tax occurrence, it was just the first link. Each place, including the first, probably paid a small amount of tax. Yet one group almost always pays the majority. This group is a real taxpayer.

Generally, the tax on the business product runs down to a retailer or customer. Manufacturers and suppliers increase the cost of their part of the product to respond for a new price. The seller must determine whether his customers will buy the product at higher costs; If they don't, then the retailer pays the tax. If the retailer believes that people will still buy the product with a higher price, N Customer is true.

This running system is not always in action. In circumstances where the product is available from manyResources, the tax is a local or the good of the seasonal or subject to destruction, and there will be a tax occurrence of the chain. For example, if a person grows oranges and the tax is collected against oranges by the regional government, the grower would probably have to pay it himself. Because oranges can come from many places and not all of them have a tax, the grower would have to keep their prices low to remain competitive. Since good is subject to destruction, the grower does not have the luxury of storage oranges until prices even outside.