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 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”.
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 to reduce the taxes it pays in its country through those it paid to a foreign government for some international trade operation.
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On the other hand, the tax credit is the amount that a company has paid as taxes when acquiring a product or input and that can be deducted before the State when making a resale. For example: A business buys a DVD player and pays for it at $125, of which $25 is taxes. The next day, the merchant sells that equipment to a final consumer for $250 ($50 tax). At the time of paying tribute to the State, the merchant will pay 25 dollars of taxes for these transactions, since the remaining 25 can be computed with a tax credit for their 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 fiscal debit (his debt to him) to calculate the amount that must be paid to the State.
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 determine that it is achieved after establishing the amounts of what are 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 a person ). There are plans where the taxpayer can use a tax credit to pay for training classes; in this way, the money returns to the State, but the taxpayer receives more services.
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 enterprises of the aforementioned country so that they can obtain reimbursements based on the investments they carry out in terms of the training of the workers they own.
Specifically, this training can be carried out both through the company’s own courses and through activities organized by public institutions.
