indirect tax

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Indirect Tax

A tax that is shifted to another person or entity. For example, sales taxes are levied on a seller but are paid by buyers; that is, the government expects sellers to pay the sales tax, but they pass the cost on to their customers. An indirect tax differs from a direct tax like a tax on income or assets, which the person or organization on whom they are levied must pay directly. There is disagreement as to whether a corporate tax is a direct tax or indirect tax.

indirect tax

A tax paid by an entity other than the one on which it is levied. For example, a retail sales tax is collected and remitted to the government by a business even though the tax is ultimately paid by the consumers. Compare direct tax.

indirect tax

a TAX imposed by the government on goods and services (which is incorporated into the product's final price) in order to raise revenues and as an instrument of FISCAL POLICY in managing the economy. The main forms of indirect tax in the UK are VALUE ADDED TAX, EXCISE DUTY and CUSTOMS DUTY. See BUDGET (GOVERNMENT), EXPENDITURE TAX.

indirect tax

a TAX levied by the government that forms part of the purchase price of goods and services bought by individuals (households) and businesses in order to raise revenue and as an instrument of FISCAL POLICY. Examples of an indirect tax are VALUE-ADDED TAX, EXCISE DUTY, SALES TAX and TARIFF.

Indirect taxes are referred to as ‘expenditure’ taxes since they are incurred when income is spent, unlike DIRECT TAXES, such as INCOME TAX, which are incurred when ‘income’ is received.

Changes in indirect tax can be used as part of fiscal policy to regulate the level of AGGREGATE DEMAND, increases in tax serving to reduce disposable income available for consumption spending, while decreases in tax increase disposable income. Indirect taxes can be used to affect the shape of demand as well as its level, increases in indirect tax serving to discourage consumption of socially disapproved products like cigarettes or alcoholic drinks, while reductions in indirect taxes encourage consumption of socially approved products like basic foodstuffs or books.

Unlike a DIRECT TAX, which varies according to the income of the taxpayer (PROGRESSIVE TAXATION), indirect taxes are regressive, insofar as the same amount is paid by each taxpaying consumer regardless of income. See TAXATION, REGRESSIVE TAXATION, INCIDENCE OF TAXATION.

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It is, if you take a holistic look at your tax processes, particularly a special opportunity that lies at the intersection of transfer pricing, customs, and indirect tax.
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Concur customers utilizing ONESOURCE Indirect Tax can now execute tax determinations on vendor invoices quickly and securely via the cloud and benefit from monthly, automatic updates to tax rates and rules resulting in increased tax calculation accuracy.
After seven years with Ernst & Young, John Forth will head the indirect tax practice for the North East, Yorkshire and Humberside.
The new stadium, which will result in about 6,100 construction jobs and 970 permanent jobs, is expected to generate about $61 million more per year in direct and indirect tax revenue than the City would have received from the Mets without it.
Base year indirect tax to GDP ratio shows positive sign but remain insignificant.
Finance Minister Masajuro Shiokawa on Tuesday suggested that consumption tax should be hiked in the medium and long term in an effort to balance the ratio of direct tax to indirect tax.
The government of the day won the equivalent of the fiscal National Lottery when this tax was introduced," said Carole Rankin, an Indirect Tax part- ner at Deloitte & Touche, Birmingham.
Our tight land-use policies function as an indirect tax, driving up the cost of housing.
BNA International (BNAI; London) has begun the publication of Tax Planning International indirect taxes, a new monthly online/print journal that provides "practical guidance and commentary about the latest indirect tax legislation around the world," BNAI said.